The Pipeline Place

June 2009 Update

noreply@blogger.com (Clive Seaton) — Thu, 04 Jun 2009 22:00:00 +0000

In the news...

Guarantees Not Offered for Mackenzie Line - Canada (6/24/2009) Concerned about competition from the proposed Alaska gas pipeline, officials from the Northwest Territories of Canada said Ottawa may need to provide loan guarantees up to C$24 billion for the Mackenzie Valley gas pipeline project. The U.S. Senate introduced a bill that would increase loan guarantees for the Alaskan natural gas pipeline to $30 billion. However, Canadian Environment Minister, Jim Prentice, said the government of Canada has not discussed giving loan guarantees or whether they might be considered in the future. Officials from the Northwest Territories are hoping the loan guarantees might jump start construction on the proposed pipeline, which would carry up to 1.9 billion cubic feet of gas per day from the Mackenzie River Delta located on the Beaufort Sea to Alberta, Canada. The project has languished for years and construction of the Alaska pipeline would likely eliminate any chance of it being built. [More here]

Green Group Asks U.S. to Bar Canada Oil Sands (6/24/2009) Environmental group, ForestEthics, has asked U.S. Secretary of State Hillary Clinton to deny permits for pipelines that would transport oil extracted from Canada's oil sands (also known as tar sands) to refineries in the United States. The green group has especially targeted Enbridge Energy Partners LP's Alberta Clipper pipeline. The group says oil from the tar sands generates up to five times more greenhouse gas emissions than oil from conventional sources. Enbridge spokeswoman Denise Hamsher said the pipeline is the basis for the U.S. State Department's decision not the source of oil production, adding that 1 million barrels a day of oil from Canada's oil sands is currently exported to the United States. State Department spokesman Andrew Laine said the State Department was reviewing the Alberta Clipper pipeline project "and it is premature to comment while the review process is ongoing." [More here]

Keystone Pipeline Work Bogged Down by Weather (6/23/2009) After having ideal weather conditions in May, construction efforts on TransCanada's Keystone oil pipeline have been stymied by an unusually wet June. Work on the 130-mile, 30-inch section that runs west of Seward, Nebraska to the Kansas border has been hindered by standing water in deep trenches excavated for the pipeline. Keystone spokesman Jeff Rauh said they were at least a week away, possibly longer, from laying pipe in the mud filled trench. Keystone builders expect to finish work on the Nebraska section of the $5.2 billion pipeline by the end of 2009. [More here]

Aboriginal Group Turns to Ottawa on Pipeline (6/23/2009) The North West Territories (NWT) first nations and Inuit groups who make up the Aboriginal Pipeline Group (APG) are seeking a larger stake in the C$16.2 billion Mackenzie gas pipeline project. The move, which would require huge federal loan guarantees, could eventually give the group a majority share in the project and allow the Canadian government to impart substantial fiscal incentives to construct the long-delayed pipeline project. Currently, APG has rights to one third of the 1,220-kilometer pipeline that will be filled with natural gas produced by Imperial Oil Ltd. (of which 70 percent is owned by ExxonMobil), Royal Dutch Shell PLC, ConocoPhillips Canada (North) Ltd. and ExxonMobil Canada Properties Ltd. Environment Minister Jim Prentice, who is accountable for the pipeline project, said AGP will increase its ownership share by financing more of the project's construction costs but it is not readily apparent how AGP will pay for those costs. [More here]

Ruby Pipeline Clears Step (6/22/2009) The U.S. Federal Energy Regulatory Commission (FERC) has issued a draft environmental impact statement (EIS) for the proposed Ruby Pipeline project, noting most adverse environmental impacts could be mitigated. According to the EIS draft, the 678-mile pipeline that would transport natural gas from the Opal hub in western Wyoming through parts of Utah, Nevada and Oregon, spans large greenfield areas that currently do not have linear infrastructure such as existing pipelines, roads or power lines. The Ruby Pipeline, an entity of El Paso Corp., is competing against proposals from other pipeline companies and still needs FERC approval on terms of service and shipping rates. If built, the pipeline will have a capacity of 1.5 billion cubic feet of gas per day and be able to serve 150,000 homes a year in West Coast markets. [More here]

OSD Pipelines Purchases Network License for PipelineStudio Design and Simulation Software (6/17/2009) Houston-based Energy Solutions International, Inc. (ESI), which supplies software solutions to optimize operational and commercial pipeline performance will deploy itsPipelineStudio® design and off-line simulation software for the oil and gas division at OSD pipelines. OSD, a global pipeline engineering services company based in Australia, purchased a network license based onPipelineStudio's "ease of use, speed and accuracy of its results." [More here]

New Pipeline Aims to Take a Bite Out of Oilsands Emissions (6/17/2009) Williams Co. plans to build a 260-mile, 12-inch natural gas liquids pipeline in Alberta, Canada from its extraction plant located in Fort McMurray to its processing facility in Redwater. “The pipeline will support the future removal of ethane from the oilsands off-gas, which will further decrease greenhouse gas and sulfur dioxide emissions and it provides a critical feedstock for Alberta chemical companies,” said Alan Armstrong, president of Williams’ midstream business. Currently, Williams is the only processor of oilsands off-gas. Construction of the $283 million pipeline will allow the company to reduce emissions of carbon dioxide (CO2) by 219,000 tons per year and sulphur dioxide (SO2) by 3,200 tons per year. The pipeline is expected to be completed by April 2012. [More here]

TransCanada Pays $550 Million for Rest of Keystone Line (6/16/2009) TransCanada is purchasing all of ConocoPhillips interest in the Keystone pipeline for $550 million as well as the assumption of $200 million in short-term debt. The deal gives TransCanada complete control over the 2,148-mile, $5.2 billion crude oil pipeline that runs from Alberta, Canada to southern Illinois in the U.S. and is designed to carry 435,00 barrels of crude per day. The company also sold C$1.6 billion in stock to help finance the deal, which is expected to be completed in the third quarter. [More here]

Demand for Arctic Gas Dries Up (6/14/2009) ................ After years of worrying about natural gas supply shortages, recent discoveries of approximately 1,200 trillion cubic feet of gas in shale deposits located in the continental U.S. and increasing imports of liquefied natural gas has led one energy executive to conclude demand for Arctic gas will be pushed back by 15 years. Steve Letwin, Enbridge Inc.’s executive vice president of gas transportation and international, says the North American natural gas industry is now "overbuilt." “The biggest issue that we now have is [insufficient] demand,” said Mr. Letwin. “And in the absence of demand, you are going to see a price for gas that is going to be kept between $5.00 and $7.00 for a long time to come.” Since the beginning of the year natural gas prices have fallen 30 percent to $3.857per million British thermal units . Although continental U.S. shale producers can make money at low gas prices, it won't be until 2025 when gas from the Arctic region will be economically viable - given the high cost of transporting the gas -- be it from Canada's Mackenzie Delta or Alaska. [More here]

'Big Gorilla' Exxon Joins $26 Billion Alaska Pipeline (6/11/2009) After sitting on the sidelines, Exxon Mobil Corp. has decided to help TransCanada Corp. finance and construct a $26 billion, 1,700-mile pipeline to carry natural gas from Alaska's North Slope to conduits in Alberta, Canada. In addition, the company will own a minority stake in the project. The announcement comes less than six months after Alaska state officials decided not to pursue the eviction of Exxon and its partners, including BP Plc and ConocoPhillips, from the Point Thomson field after decades of inaction. “Exxon Mobil has always been considered the ‘big gorilla’ necessary for this project to succeed, so their willingness to get involved and make a substantial financial investment is warmly welcomed,” U.S. Senator Mark Begich, an Alaska Democrat. Last year, TransCanada won state government support and $500 million subsidies for the project. The Denali pipeline, a proposal from BP and ConocoPhillips, is still competing for the business. Exxon expects to begin production at the Point Thomson field, located 50 miles east of Prudhoe Bay, in 2014. [More here]

Energy Solutions International and ECIL Work Together on Expansion of PipelineManager® in India (6/10/2009) Energy Solutions International, Inc. (ESI), a world-leading supplier of software solutions that optimize operational and commercial performance of oil and gas pipelines, announced that ECIL had chosen PipelineManager® to expand and upgrade their client pipeline management systems. "We are very happy to continue our strong working relationship with ECIL," said Siva Rao, Vice President, Energy Solutions International (India) Pvt. Ltd. "We believe that working together we will deliver the highest quality pipeline technology to our customers, BPCL and PCCKL." [More here]

Crosstex Energy to Sell Some Pipeline Assets for $220 Million (6/10/2009) Crosstex Energy LP, a partnership partly owned by Crosstex Energy Inc., is selling pipeline assets located in Mississippi, Alabama, and South Texas to Southcross Energy LLC for $220 million. The deal is expected to be completed on July 31. Proceeds from the sale will be used by Crosstex Energy to reduce debt. [More here]

Key US Crude Oil Link Capline Restarted (6/9/2009) Capline, a major crude oil pipeline operated by Shell Pipeline Co. LP, was restarted after crews repaired a minor valve leak. The 632-mile pipeline travels from the U.S. Gulf Coast to the Midwest and transports up to 1.1 million barrels per day of oil. Customers were not affected by the brief shutdown because Shell had enough crude in storage. The pipeline is owned by several companies, including Marathon Oil Corp and BP PLC. [More here]

South Dakota Sets November Hearing for Keystone Oil Pipeline (6/9/2009) The Public Utilities Commission (PUC) of South Dakota will hold a formal hearing on November 2 for TransCanada's application to build its proposed Keystone XL Pipeline through western South Dakota. The 313-mile, 36-inch section of the proposed crude oil pipeline will enter South Dakota at the Montana border in Harding County and exit to Nebraska at Tripp County. The South Dakota section is estimated to cost $920 million and is part of a project that will transport oil from the Alberta tar sands to refineries and terminals located on the Texas Gulf Coast. The company hopes to begin construction of the pipeline in 2011 with operations commencing in 2012. [More here]

US Bill to Raise Alaska Gas Pipeline Loan Guarantee (6/8/2009) Several leading legislators in the U.S. Senate have reached an agreement to increase the loan guarantees for building a huge pipeline to transport natural gas from Alaska to the lower 48 States. Senator Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Commitee and Senator Lisa Murkowski (R-AK) have agreed to a deal that calls for raising the 2004 loan guarantee from $18 billion to $30 billion. Under the new agreement the federal government will repay loans up to 80 percent of the cost for the pipeline project in the event the owners default on the financing. TransCanada Corp was awarded a state licence in December from Alaska to build the pipeline, but a competing proposal from BP Plc and ConocoPhillips is also in the works. [More here]

Atlas Pipeline Partners Forms Joint Venture With Williams (6/2/2009) Atlas Pipeline Partners, L.P., and a subsidiary of The Williams Companies, Inc. have finalized their agreement to form a joint venture company - called Laurel Mountain Midstream, LLC. The joint venture owns, manages and operates all of Atlas Pipeline's northern Appalachian assets as well as two natural gas processing plants and associated pipelines located in southwestern Pennsylvania. In exchange for $100 million and a $25.5 million note payable to the joint venture, Williams retains 51% ownership interest while Atlas owns 49% of the joint venture. [More here]

SemGroup's White Cliffs Pipeline Begins Commercial Operation (6/2/2009) SemGroup, L.P.'s White Cliffs Pipeline has started operations. The 12-inch, 525-mile pipeline will transport crude oil from a location near Platteville, Colorado to company owned and operated storage tanks located in Cushing, Oklahoma. The current capacity of approximately 30,000 barrels per day (bpd) can be increased up to 50,000 bpd. White Cliffs Pipeline is indirectly owned 99.17% by SemGroup, L.P., 0.415% by Anadarko Wattenberg Co., LLC, and 0.415% by Samedan Pipeline Corp. . [More here]

DNV, Gassco Develop New Gas Pipeline Inspection Technology (5/29/2009) Norway based Det Norske Veritas (DNV) and gas pipeline operator Gassco have developed an economical way to inspect natural gas pipelines utilizing acoustic resonance. According to the companies, the technology allows measurements to be taken without reducing gas flows. Trials on Gassco's pipelines were so successful that Gassco and DNV have entered into a joint venture to commercialize the technology. "For us, this means that inspection and maintenance costs can be sharply reduced while enhancing the quality of the inspections," said Gassco's Chief Executive Brian Bjordal. [More here]

Tulsa-Based 798 Welders Built the Alaska Pipeline (5/29/2009) In 1968, the largest oil field in North America was discovered in Prudhoe Bay, Alaska by Humble Oil and Refining Company (now Exxon) and Atlantic Richfield Company (ARCO). But it wasn't until the OPEC oil embargo in 1973 that serious consideration was given to developing the find. The only feasible way to transport the oil to market required the constructions of a 48-inch, 800-mile pipeline that needed 108,000 perfect and, at times difficult "girth" welds. Tulsa, Oklahoma-based Pipeliners Local Union 798, a team of journeymen welders, who spent years perfecting their craft were tapped to do the mammoth job. “Every weld was challenging in one way or another. The cold was always a big factor. The pipe sections had to be heated up in order to get a good weld. The lineup clamps would freeze to the inside wall of the pipe and we’d have to thaw them loose. The wind, the terrain, blizzards, everyday was a challenge,” according to Tulsa 798er, Kevin Leeper. The project culminated when the last thousand feet of pipeline required the scaling of a steep and jagged rock cliff. On June 20, 1977, oil began to flow from Prudhoe Bay helping to meet the energy demands of the lower 48 states. [More here]

May Update 2009

noreply@blogger.com (Clive Seaton) — Thu, 21 May 2009 15:00:00 +0000

In the news...

Updates to PipelineStudio® Design and Off-line Simulation Software (5/25/2009) Energy Solutions International Inc. is now offering version 3.2 of its industry-leading PipelineStudio software, which helps pipeline operators and engineering firms to design facilities and plan operations. PipelineStudio 3.2 features many new enhancements requested by customers. [More here]

Transco Pipeline Celebrates 60 Years (5/23/2009) ....... The longest single-project construction venture ever attempted in 1949 celebrates its 60th year in operation. Construction on Transcontinental (Transco) Gas Pipeline’s Texas-to-New York gas line began on May 23, 1949 and has grown from delivering 350 million cubic feet per day (cfpd) in 1951 to a current design capacity of 8.2 cfpd over a 10,500-mile system. The pipeline was officially in operation after gas was delivered to New York City on Jan. 16, 1951. Transco celebrates the 60th anniversary with a history of the pipeline and its development. [More here]

Gas Explosion Rocks Howard County, Fire Crews Investigate (5/21/2009) A natural gas pipeline ruptured causing a 100-foot fireball in Howard County near Fayette, Missouri. Panhandle Eastern Pipeline, operator the 24-inch pipeline, shut down an eight-mile section while crews from the company determined what caused the explosion. No one was injured and no buildings were damaged by the fire. [More here]

Spectra May Boost Investments to $1 Billion in 2010 (5/21/2009) Greg Ebel, Chief Executive Officer of Spectra Energy Corp., said the company may increase spending on new infrastructure by about 54 percent, to $1 billion next year. The increase comes after the company cut its capital expenditures to $650 million this year, from $1.8 billion in 2008 after commodity prices and Spectra's earnings declined. In an interview at Spectra’s headquarters in Houston, Ebel said, “The need for gas infrastructure is still very strong in North America, driven by a couple of factors.” Ebel estimates that gas prices will be $4 to $6 per million British thermal units (Btus) in the coming years. He also believees there will be an increasing use of natural gas for power generation and dynamic changes in supply due to unconventional sources such as shales. Spectra is currently expanding its gathering and processing capacity to handle gas from the Horn River shale in British Columbia and also adding storage caverns in the U.S. Gulf Coast region. ..... [More here]

TrancsCanada to Sell North Baja Pipeline to TC Pipelines, LP (5/20/2009) TransCanada Corporation has agreed to sell North Baja Pipeline, LLC to an affiliate of TransCanada - TC Pipelines. In exchange for the North Baja Pipeline TransCanada will receive around $200 million in cash and 6,371,680 common units boosting TransCanada ownership of the partnership to 42.6 percent. The total selling price estimated is to be worth $395 million and proceeds from the sale will be used to help finance TransCanada's $19 billion capital program. TransCanada, which acquired the pipeline in 2004, will continue to operate the 80-mile, 30 and 36-inch natural gas pipeline that extends from Southwestern Arizona to location on the California/Mexico border before connecting to a pipeline system in Mexico. [More here]

PipeLine and Gas Technology Magazine to Host 2nd Annual Pipeline Leak Detection & Monitoring Conference (5/20/2009) Hart Energy Publishing's PipeLine and Gas Technology magazine will host its 2nd Annual Pipeline Leak Detection and Monitoring Conference on October 28-29, 2009 at the Omni Woodway Hotel in Houston, Texas. The event is designed to bring experts, professionals and industry personal together to discuss topics ranging from pipeline leak detection and monitoring to real-world implementation and optimization. The event will host its first Pipeline Repair Workshop. [More here]

FERC Issues Draft EIS for Downeast LNG Project in Maine (5/18/2009) The Federal Energy Regulatory Commission (FERC) issued a draft environmental impact statement (EIS) for a project sponsored by Downeast LNG Inc. Impacts from the construction and operation of an LNG terminal and related pipelines in Maine "... reduced to less-than-significant levels with the implementation of the applicants' proposed mitigation measures and the additional measures we recommend in the draft EIS," said FERC's staff in the draft released on May 15. Ifthe project is approved Downeast will construct a terminal on the south side of Mill Cove on Passamaquoddy Bay in Robbinston, Maine and a 30-inch, 29.8-mile pipeline to a planned interconnection at an existing pipeline near Baileyville that is owned by Maritimes and Northeast Pipeline LLC. Construction on the pipeline will start next year and is expected to be completed by 2012 and begin operating in 2013. [More here]

Pipeline Company Rebuts Picketers' Claims of Substandard Wages (5/18/2009) At least two union groups have been picketing Willbros Group in Cherokee County, Texas over work the company started in March. Willbros is constructing a 143-mile gas pipeline for Energy Transfer that will run from Maypearl to Minden, Texas. The picketers are protesting the company's hiring practices. Harry New, Willbros' project director for the Cherokee portion of the pipeline said the company has a history of hiring non-union. “All the people we hire are legal to work in the U.S. We’ve also implemented a 401(k) and offer benefits. It’s up to the employee to elect to take advantage of them,” he said. At least one city in Cherokee County has benefited from the pipeline construction. Jacksonville City Manager Mo Raissi said, “Considering the economic troubles that everyone is having, this is the perfect time for (the company to be in Cherokee County); it is really helping us through a tough time.” Weather permitting the pipeline is expected to be fully operational by September 1. [More here]

Williams Receives FERC Approval to Provide Additional Natural Gas Service to Southeast by 2010 (5/14/2009) The Federal Energy Regulatory Commission approved a proposal by Williams to expand their Transco natural gas pipeline to better serve markets in the southeastern U.S. Once completed in the second quarter of 2010 the project will create 253,500 dekatherms of southbound capacity on their Mobile Lateral from Transco's mainline at Station 85 near Butler, Alabama. [More here]

Pipeline Would Put 2,000 to Work in Region (5/13/2009) Enbridge is on the verge of spending another $1.5 billion and employing an estimated 2,0000 people to complete the U.S. portion of its "Alberta Clipper" project and part of its "Southern Lights" project this year. Construction will occur in the states of Minnesota and Wisconsin. However, the company still needs some federal and Wisconsin permitting. It also faces a federal court challenge from the Minnesota Center for Environmental Advocacy. Enbridge spokeswoman Denise Hamsher predicts the construction will start mid-summer despite the current obstacles. When completed, at a cost of around $1.2 billion, the Alberta Clipper 990-mile, 36-inch diameter crude oil pipeline will run from Hardisty, Alberta to Superior, Minnesota. The $300 million Southern Lights pipeline will eventually transport light hydrocarbons or diluents. [More here]

Pipeline Pressure Fully Restored (5/13/2009) ........ Williams Pipeline Transco was given federal approval to restore normal operating pressures to its line C. This is the final of three lines to return to service. Line B ruptured near Oakville Road, Route 26 in Appomattox County, Virginia on September 14, 2008. Rupture of the 54-year old, 30-inch pipeline caused an explosion that destroyed two homes, damaged another 100 and injured five people. Line A was returned to service in November 2008. Line B returned to service in December 2008 after the company cut out old pipe and replaced it with 2,500 feet of new pipe. The pipeline system totals 10,500 miles and runs from the Gulf of Mexico to New York. [More here]

Flying J Financing, Restructuring Update (5/13/2009) .... The U.S. Bankruptcy Court for the District of Delaware has approved $20 million in debtor-in possession (DIP) financing from Pipeline Investors Capital for Flying J Inc. and its affiliated companies. The court also approved a $1.5 million increase to $10 million of DIP financing from Merrill Lynch Commodities Inc. The refiner and truckstop retailer--along with Longhorn Partners Pipeline LP, Big West Oil LLC, Big West of California LLC, Longhorn Pipeline Inc., Big West Transportation Inc. and Longhorn Pipeline Holdings LLC--filed for Chapter 11 bankruptcy protection in late December 2008. In a restructuring update the company said "Overall, our restructuring efforts are progressing well.We are continuing separate processes to sell both the Longhorn Pipeline and the Bakersfield Refinery. We have contracted with investment bankers to assist in those processes. Interest in both assets has been good, but there is still much work to do." [More here]

Energy Solutions International Releases Version 5.2 of PipelineOptimizer Liquids Pipeline Optimization Software; Hosts Product Forum at PSIG Conference (5/12/2009) Energy Solutions International, Inc. (ESI), a world-leading supplier of software solutions that optimize operational and commercial performance of oil and gas pipelines, introduces at the 40th Annual PSIG Conference the latest version of PipelineOptimizer® software for optimizing the financial performance of liquids pipeline assets. Version 5.2 features completely updated and validated functionality to assist pipeline operators in more efficiently operating pipelines for greater savings. ......... [More here]

El Paso's Southern Natural Gas Works On Line in Alabama (5/11/2009) Southern Natural Gas Co., a division of El Paso Corp. has removed from service a part of its 24-inch north main line for repairs. The natural gas pipeline located in central Alabama between their Providence and Tarrant stations is expected to be out of service for several days. The company said some interruptible services - customers who pay a reduced shipping fee in exchange for possibility of volumes being curtailed during periods of peak demand or unplanned outages - may be affected at points downstream from the Providence station. [More here]

Keystone Pipeline Breaks Ground in Yankton (5/7/2009) TransCanada Pipeline is expected to begin constructing part of its Keystone oil pipeline project in the community of Yankton, South Dakota in the next few weeks. The location will serve as one of the Midwest hubs for the pipeline that will eventually deliver 500,000 barrels of crude per day to refineries in Kansas, Illinois and Oklahoma. TransCanada expects the pipeline, which will bring oil from Canada, to be in service by the first quarter of 2010. [More here]

Enbridge Outlines Plans for Four Pipeline Projects (5/6/2009) During Enbridge Inc.'s first quarter conference call, chief executive Pat Daniel, outlined four crude oil pipeline projects as expansion opportunities for the company after 2012. The first possibility involves linking Edmonton, Alberta with Alberta's Athabasca oil sands. Two projects, Imperial Oil Ltd.'s Kearl development and Husky Energy Inc. and BP PLC's Sunrise project, are likely to spur pipeline construction. Another possibility for more pipeline projects involves connecting Cushing, Oklahoma - a major oil oil hub - with Gulf Coast markets. Currently Enbridge and BP are working towards a solution for this opportunity. A third prospect would expand east to Toledo, Ohio and Detroit, Michigan if Enbridge can win all the business for expansion projects by Marathoon Oil Corp. and Husky. The final possibility is Enbridge's Northern Gateway Project that connects Edmonton to a new marine terminal in Kitimat, B.C., giving producers access to Asian markets and pricing power. "Probably in that order, those would be the areas of focus for us," said Daniel. [More here]

Pipeline Explosion Sends Flames '700 Feet' into Sky (5/6/2009) A natural gas pipeline exploded around 4:30 p.m. in Parke County near Nyesville, Indiana. According to Parke County Sheriff, Mike Eslinger, the flames reached as high as 700 feet into the air and were seen from miles away. The 36-inch diameter section is part of a 6,500 mile pipeline system owned and operated by Panhandle Eastern Pipe Line Co. The company immediately dispatched workers to shutoff the pipeline. Elsinger praised the response from emergency departments throughout the region noting, "the response we had from surrounding counties was tremendous.” The fire was quickly contained and no injuries were reported. [More here]

Subsea 7's New Pipeline Spoolbase on Target to Open This Summer (5/5/2009) .Subsea 7 is on schedule to complete by June 2009 its new pipeline fabrication spoolbase in Port Isabel, Texas. The new facility, 1.5km in length, consists of a 1.2km stalk rack and a .3km fabrication building. The spoolbase will have the ability to fabricate and store gas and oil pipelines up to 1.2km in length and 20 inches in diameter (16-inch steel plus 4-inch insulation coatings) for spooling onto reeled pipelay vessels. The site will be able weld steel line pipe material ranging from traditional carbon steel to exotic material and be able to complete fabrication of plastic-lined pipelines, pipe-in-pipe systems and steel catenary risers. Work on a 58km pipeline for Marathon's Droshky development, the facilities firsst project, will start in early June. [More here]

Investigators Begin Probe into Martin County Pipeline Rupture (5/5/2009) Federal officials said an investigation into the cause of a natural gas pipeline rupture south of Palm City, Florida could take up to a year to complete. According to National Transportation Safety Board spokesman, Terry Williams, there is an initial report on the cause, but the investigation could take several days and the final report likely not completed for another nine to 12 months. The pipeline, operated by Florida Gas Transmission Co., is part of an approximately 5,000-mile system that runs from south Texas to the Florida Panhandle and onto Florida's east and west coasts. No fire broke out after the pipeline ruptured, but 80 people where forced from their homes,and a local high school and parts of both Interstate 95 and Florida's Turnpike south of Palm City were temporarily closed. [More here]

Frost & Sullivan Recognizes Energy Solutions International for Excellence in Customer Value (5/4/2009) .....................................................................................

Issues Opinion on Southwest Oregon LNG Pipeline (5/3/2009) A report released by the Federal Energy Regulatory Commission (FERC) has concluded there will be minimal environmental impact if a proposed liquefied natural gas terminal and pipeline are built in southwest Oregon. The 230-mile, 36-inch diameter Pacific Connector Natural Gas Pipeline would start at the proposed Jordan Cove terminal in Coos Bay and run through the Upper Rogue corridor before ending in Malian (located at the southern end of the Klamath Basin). Project applicants - Williams Pacific Gas Operator, Pacific Gas & Electric Corp. and Fort Chicago Energy Partners - will have to incorporate mitigation measures from their proposal as well as other measures recommended by FERC to limit environmental impact. The project entails crossing 30 miles of national forest, 40 miles of U.S. Bureau of Land Management property and 218 bodies of water. Numerous property owners in the region oppose the project as well as environmental groups. After reviewing the report, Lesley Adams of the Ashland, OR-based Klamath-Siskiyou Wildlands Center said, "At first glance, we have some really significant concerns about water quality and coho salmon impacts. We are also very concerned about the multiple impacts on public land. We share the concerns of affected private land owners." Others, however are in favor of the project since it will create jobs and boost the regional economy. No timetable has been set by FERC for a decision on the proposal. [More here]

Pipeline-Expansion Talk Begins (5/2/2009) .................. St. Lawrence Gas company officials and New York State legislators have started talks concerning a proposed $20 million expansion of an existing natural gas pipeline located in northeastern New York. The company is seeking funds for a 48-mile extension of the pipeline from the Town of Stockholm in St. Lawrence County to the Village of Chateaugay in Franklin County. St. Lawrence Gas has committed $13 million of the cost to the project with another $3.452 million in local and state government funding leaving a $3.75 million shortfall. The company is seeking funds from St. Lawrence County and the new $1 billion Upstate Revitalization Fund administered by the Empire State Development agency. Construction on the project is scheduled to begin in 2010. [More here]

Williams Plans Oilsands Pipeline (5/2/2009) ................. The Williams Co. is planning to start construction of a $283 million natural gas liquids and olefins pipeline in the oilsands region of Alberta, Canada in 2010. The more than 250-mile pipeline will run from Williams' extraction plant located in Fort McMurray to its Redwater processing facility. Once completed the pipeline will have a capacity of 43,000 barrels per day of off-gas liquids. The project has anticipated in-service date of April 2012. [More here]

Officials Lobby for Oil Pipeline; Project Might Start in Early Summer (4/29/2009) Don Thompson, president of The Oil Sands Developers Group and Canadian consul general George Rioux met with Illinois Governor Pat Quinn to seek support for the construction of the final phase of an Enbridge pipeline. The $350 million project started three years ago and the final phase would extend a 36-inch diameter underground oil pipeline from Flanangan, northeast of Peoria to a major refinery at Patoka, near East St. Louis, Illinois. The project faces opposition from environmental groups and some landowners, who claim the pipeline encourages reliance on petroleum products and violates property rights. Rioux said the company is in the final stages of negotiating property rights for the remaining section of the Illinois pipeline. However, he added the visit to Springfield and with Gov. Quinn is intended to intercept long-term measures such as the “low-carbon” fuel rules recently approved in California and currently under consideration by Congress. “Right now, about 50 percent of the oil coming into the Midwest is coming from Canada. That’s going to go up in the next 10 years to about 75 percent,” said Rioux. Illinois Petroleum Council executive director Dave Sykuta, who accompanied Thompson and Roux during their visit, added, “We can talk about ethanol and all the alternatives, and that’s fine, but in the end, the heavy lifting for the Illinois and U.S. economies is still going to be done by oil and natural gas-based products.” Enbridge hopes would like to complete construction by early 2010. Initial capacity for the pipeline will be 400,000 barrels per day (bpd) which can be increased up to 800,000 bpd....... [More here]

Kinder Mulls Sending Ethanol on Plantation Line (4/22/2009) ..As a result of increasing demand for alternative motor fuels, pipeline company Kinder Morgan Energy Partners is investigating the option of sending ethanol through its Plantation pipeline which runs from Louisiana to Virginia. "We are evaluating the Plantation pipeline ... as the next possible pipeline system that can handle ethanol," Jim Lelio, a renewable fuels business development director at the company, told the Alternative Fuels & Vehicles conference in Orlando, FL. Towards the end of 2008 the company began transporting batches of biofuel through its 105-mile petroleum products pipeline in Florida based on demand from customers wanting to reduce costs incurred via traditional transportation methods utilizing rail and trucks. Converting the Florida line took 18 months and cost more than $10 million to evaluate. Lelio said the company faces much greater challenges and costs in sending ethanol through a pipeline as large as the Plantation line. Problems include water absorption by the ethanol and damage to the pipeline caused by stress corrosion cracking. Later this year, Leilo said Kinder will start the engineering evaluation on Plantation "and potentially the cleaning process, which is a major factor in putting ethanol in the pipeline.", [More here]

Pipeline Project to Deliver Jobs, Cash (4/19/2009) ..... Construction on the Nebraska portion of the 2,148-mile 30-inch diameter Keystone pipeline will start by mid-May. A 215-mile section of the $5.2 billion pipeline will cross the state north to south from Cedar County near Yankton, South Dakota to Steele City near the Kansas border and cost $490 million. The project will be a boon to the state and mean six months of full-employment for 150 members of the statewide union of heavy equipment operators of which 125 are currently idle. So great is the financial impact on communities, that the construction of the pipelines have been called a traveling stimulus packages. "You get guys staying in motels, eating out, buying groceries, not to mention going to the bars at night," said Rod Marshall, business manager of the International Union of Operating Engineers, Local 571 in Omaha. The project is not without problems. While all but a dozen or so of the 478 property owners along the pipeline have accepted a one-time payment compensating them for the use of their land, one case still blocks construction of the pipeline. A Colfax County landowner declined a $106,000 offer from TransCanada but the company expects the appraisal board to make a decision before they begin construction. In addition, there are some environmental concerns, especially in Seward, Nebraska where the pipeline passes near wells that supply the city's drinking water. "I don't want oil in my water, thank you very much,” said community activist Bonne Kruse. “Pipes break, leak and spill." TransCanada says the company has in place safety measures including anti-corrosion polymer coatings, shut-off valves, 24/7 flow monitoring and deeper burial to avoid accidental damage. Company spokesman Jeff Rauh said officials can quickly detect problems, from "ruptures to a pinhole leak." Once approved the work is expected to be completed by this fall. [More here]

Alaska's Gas Pipeline Plans Hit by Downturn (4/17/2009) The severe economic downturn, credit squeeze and falling commodity prices have struck a blow to Alaska's efforts to promote interest in a natural gas pipeline to the continental US. A conference designed to encourage investment, by the oil and gas industry in the state's large pool of natural gas, has been shifted from April to September. “As the conference approached, it became evident that with more time we could make more of an impact,” said Harold Heinze, chief executive of the Alaska Natural Gas Development Authority. “The rapidly changing landscape has necessitated some further research and planning.” Both companies competing to build the pipeline - Denali, a company owned by BP and ConocoPhillips, and TransCanada - have said they plan to hold an open season in 2010. Before the 3,500-mile pipeline can be built by either company, commitments by other companies to buy the gas are required. Given that US natural gas prices have recently fallen below $4 per million British thermal units (Btus) from a high of $13.50 in July 2008 many of those companies are now scaling back projects and reducing staff.“It’s a challenging time to get the parties together,” said Bill Popp, chief executive of the Anchorage Economic Development Corporation and conference chairman. “We have to remember that the decisions made to invest in this project are long term in nature and they go beyond these current economic times.” [More here]

Proposals Would Reform Gas-Pipeline Approval (4/17/2009) Legislation backed by U.S. Representatives Jim Gerlach (R-Penn.) and Joe Sestak (D-Penn.) was drafted to address their Chester County constiuents' concerns about plans to build or expand natural gas pipelines throughout the area. Currently there are three projects in various stages of the approval process. The Williams Transco's project to expand a 2,600-foot pipeline in the region has resulted in the company taking 53 property owners to court to acquire land through the use of eminent domain. The first part of the measure establishes an independent "Office of Public Advocate" with the federal Justice Department to listen to citizens' input and evaluate decisions made by the Federal Energy Regulatory Commission (FERC). The second proposal insists FERC hold at least one public meeting before approving a project on either private or public land. “They are not required to hold any public hearings, so that’s why congressman Gerlach’s been out in front on this,” Gerlach spokesman Kori Walter said. “Let’s get it in writing. Let’s not just go on the goodwill of FERC.” Pennsylvania Senators Arlen Specter (Dem.) and Bob Casey (Dem.) have also introduced matching legislation in the Senate. [More here]

April 2009 Update

noreply@blogger.com (Clive Seaton) — Fri, 17 Apr 2009 01:20:00 +0000

In the news...

Gazprom, ConocoPhillips Discuss Alaska Offshore Exploration (4/15/2009) CEOs James Mulva of ConocoPhillips and Alexei Miller of Gazprom met in Moscow to discuss Alaskan offshore exploration and liquid natural gas (LNG) projects. "Gazprom's experience could be useful in realizing new gas projects in the United States," said Miller. Last October the two companies met in Alaska to discuss a broad spectrum of business opportunities in the largest U.S. state. Gazprom also approached BP and ConocoPhillips about joining forces to work on Alaska's Denali pipeline project, said Miller. However, during the same time, Gazprom also indicated interest in working on a rival pipeline proposal backed by TransCanada. [More here]

A Powerful Ally Against LNG Plan (4/14/2009) ............. .. Any chance for the construction of the Broadwater Project - a controversial plan to build a huge floating liquefied natural gas platform and pipeline in the Long Island Sound - may have been thwarted this week. The U.S. Commerce Department has concluded that "adverse coastal impacts outweighed [the project's] national interest." The ruling presents a tremendous obstacle to Shell Oil and TransCanada Pipeline - backers of the plan, while bolstering the efforts of those opposed to the project including a coalition of local residents, fishermen, environmentalists, state and local officials from both New York and Connecticut. If built, the natural gas platform would be around eight stories high and almost a quarter of mile long. It would also require costly Coast Guard escorts and restrict marine activity during LNG tank deliveries due to the narrow opening of the Sound into the Atlantic Ocean. [More here]

Atlas Pipeline Raising Cash: Company Sells Ozark Gas, Joins Williams Cos. in Venture (4/9/2009) In an effort to reduce corporate debt, Atlas Pipeline Partners LP has sold Noark Gas Pipeline LP to Spectra Energy Partners LP for $300 million pending regulatory approval. The company also announced a $100 million joint venture with Williams Cos. Inc. on Atlas' existing 1,800-mile pipeline and gathering system in the Marcellus Shale region of Appalachia. Together the two deals will allow Atlas to pay off around $400 million in debt. "We continue to work on other transactions, which should generate additional cash and further de-lever our company," said Atlas CEO Gene Dubay. Atlas Pipeline Mid-Continent LLC, a Tulsa-based subsidiary of Atlas Pipeline Partners, held a majority interest in the Noark natural gas gathering and transmission system that includes Ozark Gas Transmission, a 556-mile pipeline that runs from southeastern Oklahoma through Arkansas and into southeastern Missouri. [More here]

USW Challenges TransCanada Keystone Pipeline Permit for Safety (4/9/2009) The United Steelworkers of America (USW) is challenging a pending federal permit for the construction of TransCanada's Keystone Pipeline that will transport oil from Alberta, Canada to Houston, Texas. According to USW International Vice President Tom Conway, TransCanada's $5.4 billion 2,000-mile pipeline, is using a 36-inch thin-wall pipe that will be used at a higher maximum operational pressure than permitted under existing safety regulations. "Our members work hard to produce quality steel and large diameter crude oil transmission pipe right here in the U.S. that meets all safety requirements," said Conway. He added that USW workers "do not want to be denied the opportunity to provide that quality pipe based on a waiver of a fundamental safety regulation promulgated under the normal rulemaking procedures." USW's concerns came to light after pipe imported from India is being used to construct another TransCanada pipeline to a ConocoPhillips refinery in Wood River, Illinois. At a nearby US Steel Granite City mill 2,000 steelworkers have been laid-off since December with several thousand more workers on long-term layoffs at pipe mills across the U.S. A formal complaint was filed with the U.S. Department of Transportation on April 6. [More here]

FPL Proposes $1.5 Billion for 300-Mile Natural Gas Pipeline (4/7/2009) Florida Power & Light Co. (FPL) has filed a proposal to build an underground pipeline with the Florida Public Service Commission. If approved the $1.5 billion project will be the company's third major natural gas pipeline. The 300-mile, 30-inch pipeline will cross the peninsula from Palm Beach County to Bradford County in north-central Florida and help fuel a new block of power plants in Riviera Beach and Cape Canaveral. According to company spokeswoman, Jackie Anderson the pipeline will be buried four feet below ground following a route, 90 percent of which FPL currently has an existing right-of-way. "Our intent is to locate the pipelines in areas with minimal or no development. These are going under transmission routes. These are grassy open fields," said Anderson. The company's two other pipelines from off-shore sources in the Gulf of Mexico. The new pipeline will deliver natural gas from on-shore areas in Texas, Louisiana and Arkansas and make Florida less dependent on sources of fuel from hurricane-vulnerable areas of the Gulf of Mexico said Anderson. The company wants to finish construction and begin operation of the pipeline by 2014. Utility regulators have yet to set a timetable for review FPL's proposal. .. .... [More here]

Enbridge Seeks Shippers for Proposed U.S. LaCrosse Pipeline (4/1/2009) Enbridge Inc., Canada's largest energy pipeline operator, will conduct a non-binding open season from April 13 to May 15 to seek energy producers to ship natural gas through the its proposed LaCrosse pipeline. If built, the approximately 300-mile pipeline will start from Enbridge's Carthage hub in Carthage, Texas and end at an interconnection with the Sonat pipeline at Washington Parish in southeastern Louisiana. Up to 12 pipeline interconnections can be added along the route, depending on shipper interest. "We anticipate this pipeline could move at least one billion cubic feet a day of natural gas from the Carthage area and the Enbridge Carthage Hub and the Haynesville Shale producing basin to various interconnections with market-area pipelines located across Louisiana," said Pat Daniel, president and CEO of Enbridge. "The Haynesville Shale is one of the most active gas plays in the United States. Our proposed LaCrosse Pipeline provides a creative and flexible solution to relieve market constraints affecting producers in the booming region." The pipeline is expected to be built by late 2011 or early 2012. [More here]

Obama Signs Far-Reaching Public Lands Bill (3/31/2009) President Barack H. Obama has signed into law the bipartisan supported legislation HR 146 -- a far-reaching public lands bill into law. The measure, composed of 160 smaller bills calls for the addition of 2 million acres to the federal wilderness system, involves historic sites, and removes more federal acreage from being used for oil and gas leasing and also as an alternative energy generation sites among other provisions. Lisa Murkowski (R-Alaska) said the new law also includes an amendment to the Alaska Natural Gas Pipeline Act authorizing the federal coordinator to establish fees that could be spent without further congressional appropriation for activities authorized under current law. [More here]

Pennsylvania Seeks More Say on Shale Pipeline (3/29/2009) Because development of the Marcellus Shale formation may last 50 years, Pennsylvania state regulators are seeking to extend the Public Utility Commission's (PUC) authority over non-utility pipelines to ensure underground pipelines transporting natural gas are properly maintained and safe. The Marcellus Shale region lies beneath a large section of Northeast and Western Pennsylvania and PUC officials forecast a large increase in construction of non-utility natural gas pipelines as the area is developed. PUC Chairman James Cawley said the agency is seeking authority to inspect pipelines owned by commercial natural gas producers - normally outside its traditional jurisdiction over public utilities - and increases in fines for pipeline safety violations. "There will be a need for new (Marcellus Shale) pipelines in the future to accommodate the anticipated volume of gas," said Stephen Rhoads, president of the Pennsylvania Oil and Gas Association. Although he has not seen PUC's proposal he suggested the small "gathering" pipelines don't necessitate the type of regulation the agency is considering because the industry already has its own inspection and maintenance programs. "You don't want to lose your marketable commodity," Mr. Rhoads said. "Every leak is a dollar lost. It would be silly for us not to maintain the integrity of our pipeline system." [More here]

Frost & Sullivan Recognizes Energy Solutions International (3/24/2009) Energy Solutions International, Inc. (ESI), a world-leading supplier of software solutions that optimize operational and commercial performance of oil and gas pipelines, has won the 2009 Excellence in Customer Value of the Year Award in the Global Pipeline Management Solutions category from Frost & Sullivan. In conferring the award, Frost & Sullivan recognized ESI for ingenuity “in addressing the challenges of pipeline management firms by managing the total life cycle and operations.” ESI markets its software solutions both as standalone deployments and as an integrated suite that optimizes the complete spectrum of pipeline operations. It is this inclusive approach, addressing the markets’ need to optimize assets while reducing costs, which earned ESI the Customer Value award. [More here]

POET Partners Up for Proposed Dedicated Ethanol Pipeline (3/14/2009) Magellan Midstream Partners, L.P. has signed an agreement with POET, LLC to continue examining the feasibility of constructing a dedicated ethanol pipeline from the U.S. Midwest to distribution terminals in the Northeast. “POET adds valuable experience as a leader in ethanol production, marketing and logistics to this project,” said Don Wellendorf, Magellan’s president and chief executive officer. POET is the world's biggest ethanol producer and manufactures more than 1.8 billion gallons each year. “This agreement with Magellan is an important step in improving long-term transportation economics for our facilities and consumers,” said POET chief executive officer Jeff Broin. “A project of this nature would provide benefits throughout the ethanol industry, agricultural community and the economy in general. It would also represent another major step forward in the efficiency of producing and delivering ethanol to the marketplace.” If built, the proposed $3.5 billion, 1,700-mile pipeline would collect ethanol from production facilities located in Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio and efficiently transport it to terminals in major Northeastern markets. [More here]

March 2009 Update

noreply@blogger.com (Deb Harrsch) — Thu, 19 Mar 2009 17:00:00 +0000

In the news...

TransCanada Challenged on Alaska Pipeline License (3/14/2009) In light of current economic conditions, two Alaskan state legislators have called for a review of TransCanada Corp.'s license to build a $26-billion natural gas pipeline. Representative Jay Ramras (R-Fairbanks) and Craig Johnson (R-Anchorage) introduced the resolution in the Alaska House because of concerns about the project’s financing given the current global recession. If passed the motion would require Gov. Sarah Palin and the attorney general to review the application and present their findings within six months. TransCanada has secured approximately $4 billion (U.S.) for the project and maintains low commodity prices will not affect the project. "A change in the natural gas market price over the last six months does not swing whether or not this project is viable," said Tony Palmer, head of TransCanada's Alaska project. "In the best case, we will be in service in the fall of 2018, and then we will be in-service for 25 to 50 years beyond that. It's the price of natural gas at that time that is critical, not today's price." Last year TransCanada received an exclusive license for the proposed 2,761-kilometer pipeline system that will transport an estimated 35 trillion cubic feet of gas from Alaska's North Slope. The license includes $500 million in Alaska state tax incentives for the company. [More here]

Alaska Legislature Considers Uncoupling Oil and Natural Gas Taxes to Boost State Revenue (3/13/2009) Alaskan Senator Bert Stedman (R-Sitka and co-chair of the Senate Finance Commitee) wants to decouple taxes on gas production and oil production. “The end goal is to protect the state revenue stream and to offer stability and predictability to the industry, and encourage development and production,” Stedman said. Alaska uses a progressive tax structure for oil with higher oil prices netting a higher tax burden. Currently, oil and gas taxes are combined so when producers earn large profits from oil, they can use profit on gas (which is usually less profitable by volume than oil) to reduce the total amount of taxes paid to the state. Stedman argues that under certain market conditions tax revenues will be diluted creating an unstable tax environment. However, Alaskan State Department of Revenue Commissioner, Pat Galvin, disagrees. “Our analysis indicates that no changes are needed, that the taxes are appropriate both for the state and for the producers. Part of that profitability is that they (producers) are reducing the tax burden on oil.” He warned that changing the current tax laws could open a Pandora's box with the state losing out in the end. Changes to the tax structure could be made as soon as the start of the 2010 legislative session and in time for open season later in the year. [More here]

ConocoPhillips: Alaska Gas Pipeline to be in Service by 2019 (3/11/2009) The Denali pipeline, proposed by ConocoPhillips and BP, can be brought into service by 2019 said a ConocoPhillips executive during a recent analyst meeting. The estimated $30 billion, 2,000-mile pipeline is expected to start accepting bids for gas transportation next year. The pipeline could transport 2 billion cubic feet of gas a day or around 7 percent of the total U.S. daily consumption. The companies are also considering the construction of a 1,500-pipeline from Alberta, Canada to Chicago, Illinois. [More here]

GE: Sticks with That Old Energy Religion (2/27/2009) ...... General Electric has announced it will invest $276 million in U.S.-based oil and gas projects. The total includes $126 million in funds for Regency Energy Partners to complete the Haynesville natural gas pipeline in North Louisiana. “This project will improve the overall energy security and independence of the United States by alleviating a transportation bottleneck experienced by many producers in the Haynesville area,” said Dan Castagnola, managing director at GE Energy Financial Services. The remaining $150 million will be used to fund the operation of a floating oil and gas rig located in the Gulf of Mexico. The rig will be operated in partnership with ATP Oil & Gas Corporation. [More here]

TransCanada Pleased with NEB Decision to Federally Regulate Alberta System (2/26/2009) The National Energy Board (NEB) of Canada has approved TransCanada's application for the federal regulation of its Alberta System pipeline. The decision gives the company more flexibility to transport natural gas to North American markets and draw new gas supplies. "The decision is good news for our customers, Alberta System stakeholders and our company," said Hal Kvisle, TransCanada president and CEO. "Having the Alberta System federally regulated means TransCanada can extend the pipeline across provincial borders, allowing us to provide potential customers a direct connection to the pipeline network, and provide attractive service options and rates to producers in British Columbia (B.C.) and the Northwest Territories." The regulatory oversight change increases the chance that B.C. and Northern gas will directly integrate with the Alberta hub -- North America's largest trading point. Kvisle said TransCanada expects to file additional applications seeking approval to expand the Alberta System into northeastern B.C. If approved, a 77-kilometer (Groundbirch) pipeline for the Montney, B.C. area could be operational by the fourth quarter of 2010 and a 155-kilometer Horn River line could transport gas by the first half of 2011. [More here]

Epsilon Energy Commences Construction of the Highway 706 Pipeline (2/25/2009) Epsilon Energy Ltd. has begun the construction of a natural gas pipeline and related production infrastructure within its Highway 706 project in Pennsylvania. The U.S. Department of Environmental Protection has given the company an ESCGP-1 permit to begin build-out of a compression facility and gathering system to bring natural gas production to a sales point on the Tennessee Gas pipeline. So far, Epsilon has obtained more than 25 miles of right-of-way for pipeline construction and expects to start natural gas production at the end of June 2009. [More here]

Willbros Announces New Project Awards (2/25/2009) ...... The Willbros Group Inc. as bean awarded two new projects valued at approximately $181 million. The first contract awarded to Willbros U.S. Construction division is for the construction of the Texas Independence Pipeline by Energy Transfer Fuel, L.P. - a subsidiary of Energy Transfer. The project involves building a 143-mile, 42-inch pipeline from Minden in Rusk County, Texas to a location near Maypearl in Ellis County, Texas. Work is scheduled to begin in March 2009 and be finished in time for a third quarter 2009 in-service date. In addition Willbro's Downstream segment, InServ, has been given verbal commitment from the National Cooperative Refinery Association (NCRA) for the extension through September 30, 2011 of its current contract for Program Management Services associated with part of a planned Heavy Crude Expansion Project (HCEP). Willbros President and CEO Randy Harl said, "We are pleased to announce these two awards which demonstrate our potential market opportunities. Both Energy Transfer and NCRA are valued customers for which we have performed multiple successful projects. We appreciate their confidence in our execution abilities and look forward to completing two more important projects on their behalf." [More here]

Gas Pipeline Expansion Put on Hold (2/24/2009) ........... Georgia-based Colonial Pipeline spokesman Sam Whitehead said a proposed 460-mile petroleum products pipeline has been put on hold indefinitely. The expansion, announced in 2006 and scheduled for completion in 2012, would have added a third pipeline between Baton Rouge, Louisana and Atlanta, Georgia. "The urgency of doing this now is not as clear as it was in 2006," Colonial President and CEO Tim Felt said in a press release. The original cost estimate for construction of the pipeline was $3 billion. Despite the poor economic climate, the company continues to seek permits for construction of the pipeline. When asked if delaying the expansion would create supply problems in the future, Whitehead said, "It's too early to tell. It certainly could if things come back as quickly as they went down-hill."... [More here]

Pipeline Could Bring $750 Million and 2,000 People to West River, South Dakota (2/19/2009) The TransCanada Keystone XL pipeline project is expected to bring up to 2,000 crude oil pipeline workers, their families and $750 million of investment into northwestern South Dakota over the next two years. The 2,000-mile, 36-inch diameter steel pipeline will link to an existing pipeline in Kansas and transport oil from Alberta, Canada to the Gulf Coast of Mexico refineries. When completed by 2012 or 2013, at an estimated cost of $7 billion, the pipeline could be the longest in North America. [More here]

Stealth Energy Announces Pipeline Completion Phase (2/18/2009) Stealth Energy Inc. has redeployed it crews to finish construction of its gas pipeline project in Stillwater County, Montana. The company had to halt construction of the last two miles of the pipeline for three months due to adverse winter conditions. When completed the pipeline will be used to transport and sell gas from three shut in commercial wells: Hailstone 1-23, 2-23 and Copulous 1-18. It will eventually connect to further wells. [More here]

February 2009 Update

noreply@blogger.com (Deb Harrsch) — Tue, 17 Feb 2009 16:00:00 +0000

In the news...

Denali Group to Build Gas Treatment Plant (2/15/2009) The Denali pipeline group (owned by ConocoPhilips and BP) has awarded an engineering contract for a $2 billion gas treatment plant in Prudhoe Bay, Alaska to Fluor WorleyParsons Arctic Solutions. The engineering firm, a joint venture between Fluor and WorleyParsons, has retained CH2M Hill as its subcontractor for Alaskan support services during the design phase of the project. The size of the contract is confidential, but according to Denali spokesman, Dave MacDowell, "It is in the range of several million dollars." Technical studies for the plant will include cost estimates, execution planning, project design and anything else needed to move the project forward, MacDowell said. The plant will be a part of the planned $30 billion Alaska natural gas pipeline project that will run from Alaska's North Slope to Alberta, Canada. If built the gas treatment plant will be the largest of its kind in the world and be responsible for removing hydrogen sulfide, carbon dioxide and other impurities as well chill and compress natural gas before being sent to the pipeline. [More here]

Enbridge Has Plans for Big Gas Pipelines (2/14/2009) ... As a result of a number of oil pipeline projects being delayed or set aside, Enbridge Inc. is now considering large-scale natural gas pipeline projects to fill the void. The company has already delayed its plans to build the Fort Hills oil pipeline. "It is fair to say we will see some delay and push-out beyond ... our long-range plans on some of the oil projects, and some gas projects to fill it in," said Pat Daniel, Enbridge's chief executive. "We're very active on the gas side already in developing alternate opportunities." Projects such a proposed Rockies Alliance Pipeline that would connect Chicago with the natural gas fields in the Colorado Rockies could take a more significant role in the company's plans after 2012. [More here]

State Agency OKs New Pipeline Rules After Calls from Residents, Officials in Barnett Shale (2/14/2009) ............. In response to citizen's concerns about the Barnett Shale field, the Texas Railroad Commission has approved a set of new rules for natural gas pipelines in the state of Texas. The state commission, which oversees gas, oil and pipeline industries, has approved new rules that state safety regulations for low-pressure production and flow lines that connect gathering lines that run through heavily populated areas. Previously, the pipelines were virtually unregulated and were only inspected after a complaint or problem was noticed during inspections of a well or lease. Inspections will take place on an annual basis. In addition, gas distribution systems will now have to report any leaks and any unrepaired lines to the commission every six months instead of just writing reports without submitting them. Funding has been requested by the commission for 13 more pipeline inspectors and 21 more gas and oil well inspectors. [More here]

Obama Will Discuss Proposed Alaskan Gas Pipeline with Canadian Leaders (2/12/2009) President Barack Obama promised to discuss Alaska's proposed gas pipeline with Canadian leaders during his trip to Ottawa on February 19. "It's a project of great potential and something I'm very interested in... as I mentioned during the campaign, I actually think that for us to move forward on the natural gas pipeline as part of a comprehensive energy strategy - that includes both more production as well as greater efficiency - makes a lot of sense," Obama said. "As it happens, Prime Minister Harper, as well as President Calderón of Mexico, have a great interest in energy. Obviously, Canada is one of the biggest energy players in the world. They share an interest in not only the production side, of the economic benefits, but I think they're also interested in a broader conversation about efficiency and how it relates to issues like climate change." Alaskan Gov. Sarah Palin wrote a letter to Pres. Obama earlier in the month requesting he discuss the pipeline with Prime Minister Stephen Harper during his visit. The Alaska legislature granted a Canadian company, TransCanada, an exclusive state license to build the pipeline last year. [More here]

TransCanada CEO Downbeat about Mackenzie Line (2/11/2009) Despite years of planning and rising costs, regulatory delays have increased the chances that the Mackenzie natural gas pipeline will not be built according to TransCanada's CEO. "I confess to some pessimism on the Mackenzie project, and it may well not proceed," Harold Kvisle said. The most recent setback came at the end of last year when two regulatory panels said they expected to deliver their reports on the project months later than originally scheduled. TransCanada currently does not have a stake in the pipeline but can acquire 5 percent through the native-owned Aboriginal Pipeline Group, which aims to control a third of the project. In January, the Canadian government offered financial aid for the proposal to cover pre-construction costs, roads and airstrips. "I have great sympathy for the current government of Canada, which is doing everything it can to move the project forward," Kvisle said. "But it inherited a mess that's been building up for a couple of decades." Despite Kvisle negative comments, Canadian Environment Minister, Jim Prentice, told reporters in Ottawa, "I continue to be optimistic about the project. It's a very important project for our country." The proposal, led by Imperial Oil Ltd, calls for the construction of a 760-mile pipeline through the Northwest Territories to Alberta and will be able ship up to 1.9 billion cubic feet of natural gas a day. [More here]

Massive Gas Release on North Slope Could Have Destroyed Pump Station, Officials Say (2/8/2009) According to investigators, on a January 15, a massive release of Prudhoe Bay natural gas that filtered into Trans-Alaska Pump Station 1, the gas could have destroyed the building and shutdown Alaska's North Slope oil fields. The incident occurred, when a "bullet shaped" cleaning pig (a device used to scrape walls and detect problems) became stuck after workers "lost track of its exact location" along the pipeline. Workers for BP PLC were using pressurized natural gas to move the pig through a corroded 34-inch pipeline. The pig was being to used to swab oil out of the pipeline in preparation for its decommission. After the release, Pump Station 1 (through which all oil from the North Slope must pass) was shut down from 3:06 PM to 3:41 PM. Alyeska Pipeline Service Co., operator of the 800-mile pipeline, said the pipe section was among the major Prudhoe trunk lines found to be severely corroded because of BP's lack of proper maintenance. Alyeska acknowledged an explosion or fire could have jeopardized the safety of over 60 workers at the pump station and caused shutdown of the oil fields. The incident, which alarmed regulators, BP and Alyeska workers, was not reported to the authorities until January 20 - five days after it happened. The U.S. Pipeline and Hazardous Material Safety Administration, the Joint Pipeline Office - an Anchorage umbrella agency for federal and state regulators overseeing Alaskan pipelines and Congressional offices with oversight over energy development and safety are investigating the matter. [More here]

Lawmaker Sends Note to Hillary Rodham Clinton on Gas Pipeline (2/5/2009) Texas State Rep. Chente Quintanilla has sent a letter to Secretary of State Hillary Rodham Clinton asking her to determine why a presidential permit was granted last October for the construction of a gasoline pipeline from El Paso, Texas to Juárez, Mexico without a proper review of an environmental impact study. Specifically the letter requests she provide answers as to why the interests of PMI Service North America - a U.S. subsidiary of Mexico's national oil company Pemex - had more priority than those of U.S. citizens. "Our arguments were ignored," Quintanilla wrote. "What is worse, those individuals in the State Department who are charged with protecting the interests of U.S. citizens allowed Pemex to use our arguments in making their case against our interests." PMI officials have said the pipeline is a safer way to transport diesel and gas than the trucks they currently use. Work has started on the pipeline and it is expected to be in operation later this year. [More here]

Butte County Could Host New Natural Gas Pipeline (1/29/2009) American Oil & Gas is seeking to install a new natural gas pipeline along county roads in the north central section of Butte County, South Dakota. According to company engineer, Neal Neumiller, a six-inch diameter steel pipeline would be buried five to six feet underground following the public right of way. The 20-mile line would travel from wells and a compressor located near U.S. Highway 85 west to the Williston Basin Instate pipeline. If the project is approved by the Butte County Commission, an American Oil & Gas land agent said the county will receive a one-time fee of $60,000 for the access. [More here]

Aboriginal Leaders Applaud Mackenzie Delta Pipeline (1/26/2009) Mackenzie Delta aboriginal leaders cheered and celebrated the start of the northern pipeline hearings in Inuvik, North West Territories. "We're ready,'' said Fred Carmichael, president of the Gwich'in Tribal Council and chairman of the Aboriginal Pipeline Group (APG). "We've had 30 years to get ready since (Thomas) Berger,'' he added, in reference to the 1970s commissioner who stopped the first attempt at constructing the pipeline so the northern communities could gain strength to deal with the gas industry. APG owns one-third of the $4.8 billion proposed natural gas pipeline that will run 1,200 kilometers through the Mackenzie Valley to Alberta. National Energy Board (NEB) chairman Ken Vollman called the $7 billion Mackenzie Gas Project "an historic undertaking" that is the largest proposal to seek NEB's approval. Project manager Randy Ottenbreit said, "The Mackenzie Gas Project needs all the components in order to succeed," including the approval of a $2.2 billion Mackenzie Delta production facility or nothing will go ahead. In an area with unemployment approaching 40 percent Mackenzie Delta residents seek jobs that require 12-hour days in -40 degrees F winter weather. "The biggest challenge is to get our people off dependence on government,'' Carmichael said. "That creates a terrible society. The only way out I see is to become self-sufficient.'' Despite most residents' enthusiasm for the project several groups oppose it including the Sierra Club of Canada and the Deh Cho - a lone aboriginal holdout who is not participating in ownership of the pipeline. The environmentalists claim protecting the northern boreal forest from destructive development will preserve the value of the forest they estimate to be around $93.2 billion a year or more than double the expected $37.8 billion net revenue generated from resource extraction. [More here]

BP Official: Alaska Natural Gas Pipeline Prospects Dim (1/23/2009) The overall economic collapse, declining energy prices and the emergence of unconventional energy sources has dimmed prospects for constructing a pipeline from Alaska's North Slope according to a senior BP executive. "It's not a pretty story right now in terms of North American natural gas markets," said Brian Frank, president of BP Energy Co and BP's North America Gas and Power at an annual industry conference in Anchorage, Alaska. BP and ConocoPhillips - two of the three major North Slope oil producers - are competing with their Denali proposal against TransCanada to build a pipeline around 1,700 miles long from the North Slope to Alberta. Although TransCanada, which has an exclusive license for the project from the state of Alaska, estimates the project will cost $26 billion, Frank thinks the cost will be in the $30 to $40 billion range. "It's very difficult to find the financing and funding for projects and infrastructure," he said. In fact economic conditions are so bad that each week several major customers for BP's natural gas are filing for bankruptcy and others are now on prepayment plans "because they are not credit worthy," he said. The project also faces competition from shale gas produced in the Rocky Mountain and Midwest states. Despite the adverse conditions, Frank believes the project can move forward but only if there is a "stakeholder aignment" that includes regulatory and fiscal "reliability" from the state of Alaska. "How do you know the economics for your project if you don't know what you're going to pay in taxes?" he said. Both the Denali and TransCanada proposals would seek a license from the Federal Regulatory Energy Commission in 2014 and then financing for the project assuming economic conditions have recovered by that time. [More here]

Scientist: New Fault Could Mean Major Arkansas Temblor (1/21/2009) A recently discovered fault near Marianna in eastern Arkansas could trigger a magnitude 7 earthquake with an epicenter located near a major natural gas pipeline. According to Haydar Al-Shukri, director of the Arkansas Earthquake Center at the University of Arkansas at Little Rock, the fault is separate from the New Madrid fault responsible for several quakes in 1811-12 that caused the Mississippi River to flow backwards. The fault is thought to have formed in the last 5,000 years and already experienced at least one magnitude 7 earthquake. "This is a very, very dangerous (area) at risk of earthquake," Al-Shukri said. "When you talk about (magnitude) 7 and plus, this is going to be a major disaster." Al-Shurkri did not say when a quake may happen though he did predict it would affect Little Rock, Tennessee and Mississippi. Although he declined to name an owner of the pipeline, an Arkansas Public Service Commission map of the area indicates Arkla Energy Resources has a pipeline in the area. Rebecca Virden, spokeswoman for CenterPoint Energy Inc. which owns Arkla, said pipes are "all over the place... We, CenterPoint Energy, or someone else has a pipeline everywhere." Several quakes occur each year in Arkansas near the New Madrid Seismic Zone but so far none of the temblors have been connected with the Marianna fault according to Al-Shukri. [More here]

January 2009 Update

noreply@blogger.com (Deb Harrsch) — Thu, 15 Jan 2009 20:00:00 +0000

In the news...

EnCana Offers Up to $500,000 for Info on B.C. Pipeline Bombings (1/14/2009) A week after the fourth attack on a pipeline near Dawson Creek, British Columbia, the Royal Canadian Mounted Police (RCMP) have identified "persons of interest". RCMP Sgt. Tim Shields said although those people are not co-operating with the ongoing investigation, "We are asking that they do the right thing." The comments were made during a news conference at which EnCana Corp. - one of Canada's largest energy companies and operator of the bombed pipeline - offered a $500,000 reward for information leading to the arrest and prosecution of those responsible for the attacks. EnCana executive Mike Graham said the company is grateful no one has been seriously hurt up to now. "But if the attacks continue there is a serious risk of injuries or even death," Graham said. He went on to say, "After consulting with the RCMP and the Crown assigned to the prosecution, EnCana will determine the monetary value, if any, of the information provided to the investigation." [More here]

Iroquois Announces 08/09 Expansion Phase 2 In-Service (1/14/2009) Iroquois Gas Transmission System, L.P. has constructed Phase 2 of its 08/09 Expansion Project - two new 10,300 horsepower (hp) compressor units at its Milford, CT compressor station. Phase 1, a 1.6-mile pipeline in Newtown, CT, was completed on November 14, 2008. After completing the third phase of the project, a second 10,300 hp compressor at their Brookfield, CT compressor station, Iroquois will be able to receive and additional 200 million cubic feet per day of natural gas at its interconnect with the Algonquin Pipeline in Brookfield, CT. [More here]

Inter Pipeline Slashes 2009 Capital Spending (1/13/2009) After almost completing its Corridor pipeline expansion project, Inter Pipeline Fund is cutting its 2009 capital budget to C$209 million from C$628 million a year ago. The $1.8 billion Corridor expansion consists of an approximately 470-kilometer, 42-inch diluted bitumen pipeline and related facilities between the Muskeg River mine and Scotford up-grader in Canada's oilsands region near Edmonton, Alberta. When completed and in-service by 2010, the pipeline will boost bitumen capacity to 465,000 barrels per day from 300,000 bpd. The expansion project is a joint venture between Shell Canada (60 percent stakeholder), Chevron Canada and Marathon Oil Canada Corp. (each with 20 percent). After acquiring the Corridor system almost two years ago for C$760 million from Kinder Morgan, Inter Pipeline became the largest bitumen transporter in the Alberta oilsands region moving half of all production. [More here]

Oil Market Manipulation Alleged (1/10/2009)........... . Several weeks after Flying J filed for Chapter 11 protection, a memo written by a union official at the company's Big West refinery located in Bakersfield, CA, has led to accusations that Shell Oil is trying to manipulate California's gasoline market. The memo states "the refinery is out of crude oil" and blames Shell for closing a pipeline that brings crude into the plant, thus depriving it of raw material. In 2004, Shell owned the refinery and threatened to close it, claiming it wasn't profitable. At the time California politicians suspected Shell was seeking to raise gas prices by reducing gasoline supplies and the company was pressured to sell the plant instead. Sen. Barbara Boxer has asked Attorney General Jerry Brown to investigate the memo's accusations. "The Big West Refinery supplies our state with 2 percent of its gasoline and 6 percent of its diesel fuel, and in these tough economic times, Californians can't afford high gas prices stemming from refinery closures," Boxer, D-Calif., wrote in a letter to Brown, who said he'd "take a hard look at the situation." Shell spokeswoman Alison Chassin responded that Flying J owes Shell "tens of millions" of dollars for crude already delivered to the plant and, although Shell is no longer shipping oil, other suppliers are free to use the pipeline. She also said the refinery has another pipeline not owned by Shell that supplies crude. [More here]

TransCanada Completes $2-Billion Debt Issue (1/10/2009) Pipeline and power company TransCanada Corp. has completed a $2-billion debt financing. The offering done in the U.S. through TransCanada Pipelines Ltd., consisting of $1.25 billion in 30-year notes and $750 million in 10-year notes that will be used to partially fund capital projects and retire maturing debt. [More here]

Alaskan Gas Pipeline Tops P&GJ's Pipeline Opportunities Conference (1/8/2009) The fifth annual Pipeline Opportunities Conference, slated for March 11, 2009 at the George R. Brown Convention Center in Houston, TX will highlight the most recent developments in the Alaskan natural gas pipeline project. Jeff Share editor of Pipeline & Gas Jouranal and conference chairman, said the conference provides a rare opportunity to bring together for the first time executives from TransCanada Pipelines and the Alaskan Natural Gas Development Authority (ANGDA) with officials from Gov, Sarah Palin's administration and the Office of Federal Coordinator - who are all involved in the project. “On one issue Gov. Palin and President-elect Obama agree: they want that pipeline built," Share said. "Alaska needs that revenue and the lower 48 needs that gas and the jobs it will create.” [More here]

Pipeline Build-Out Helped State Avoid Economic Disaster in 2008, but Future Is Uncertain (1/7/2009) Wyoming managed to avoid economic disaster in 2008, in large part due to a six-year, $9 billion natural gas pipeline build-out. The state's natural gas production has grown from 4 billion cubic feet per day (cfd) in 2002 to 6.5 billion cfd this year, resulting in an increasing reliance on natural gas revenues. However, the future outlook is perplexing. "I've been through three downturns, but this has just been an unbelievably rapid change from $150 per barrel in July to $50 per barrel," said Don Likwartz, outgoing supervisor of the Wyoming Oil and Gas Conservation Commission. Spot price for Wyoming gas has proven to be just as volatile. Even though the Rockies Express substantially increased export capacity, natural gas production continues to outpace export capacity. When the Rockies Express was taken off-line last September for hydrostatic testing, 800 million cubic feet of daily capacity was lost, causing Wyoming's wholesale price to plunge to $1.78 per thousand feet while the price on the NYMEX was $8.39. Even though there are nine new pipeline projects planned to expand the regions natural gas export capacity, none are on schedule. If construction is not accelerated, Wyoming may face another regional price collapse in the 2009-2010 time frame....... [More here]

Fourth Pipeline Blast - EnCana Targeted with Another Explosion Near Tomslake, B.C. (1/6/2009) The fourth in a series of bombings striking EnCana Corp.'s pipeline and facilities partially destroyed a metering shed at a wellhead near Tomslake in northeastern British Columbia. The most recent attack occurred 20 kilometers southeast of Dawson Creek and approximately 5 kilometers from the site of the third explosion in October. Royal Canadian Mounted Police (RCMP) Sgt. Tim Shields considers the latest attack directly linked to the previous ones. “The explosive sites have been successively closer and closer to nearby residents ... the previous explosion occurred about 800 meters away from the nearest house. This explosion took place 250 meters away from the nearest house ... This poses a very real risk to the public,” said Shields. No motive for the attacks has been determined. “We don’t know if this is some type of message that the suspect or suspects is trying to send to the public, but what it does solidify in the mind of our investigators is that we need help from the public. There must be someone out there who knows exactly who it is that’s setting off these explosions,” said Shields. EnCana community advisor, Brian Lieverse, said he had no idea why the company was being targeted. Although no sour gas leaks have resulted from the attacks Lieverse said there are safety protocols in place at all of EnCana's facilities in the event a leak does occur. [More here]

Show Us Mackenzie Pipeline Decision in March: Agencies to Panel (1/5/2009) Two of the three agencies responsible for creating a panel to review the proposed Mackenzie Valley natural gas pipeline in the Northwest Territories have called on the panel to release a "decision document" by March 31, 2009. The report on potential impacts along the route of the proposed pipeline on people and the environment along its route was scheduled to be released in December 2009. However, a letter to panel chairman Robert Hornal from chairmen of the Mackenzie Valley Environmental Review Board and the Unuvialuit Game Council (Rick Edjericon and Frank Pokiak) demanded the Joint Review Panel release its decision on the pipeline by March with a final published report by the end of June 2009. After concluding public hearings in November 2007, the panel has been silent on the subject, only saying the report would be released sometime in 2009. A consortium of companies led by Imperial Oil wants to build a 1,200-kilometer natural gas pipeline through the Northwest Territories to the Alberta connecting to existing pipelines serving southern markets. [More here]

Oil Company Flying J Files for Bankruptcy (12/22/2008) Pipeline operator, oil producer and refiner, Flying J, has filed for Chapter 11 bankruptcy protection. The privately held company cited weak oil prices and financial turmoil in the credit markets has the reason for the filing. "With this sudden and unanticipated inability to meet our liquidity needs, we regret that we had no other choice than a Chapter 11 filing to enable us to stabilize our financial base," J. Phillip Adams, president and chief executive, said in a statement. The company has around 200 oil and gas wells in the Rocky Mountain region, a 70,000-barrels-per-day refinery in Bakersfield, California, a 35,000-bpd refinery in Utah, a 700-mile refined products pipeline owned by its Longhorn Pipeline Holdings unit and 250 retail outlets. Last year the company had sales of more than $16 billion. The company does not expect to layoff any employees as a result of the bankruptcy filing. [More here]

December 2008 Update

noreply@blogger.com (Deb Harrsch) — Wed, 17 Dec 2008 01:30:00 +0000

In the news...

Environmental Impact Statement Underway for Gas Pipeline Between Fairbanks, Beluga Gas Field ............ (12/14/2008) The Alaska National Gas Development Authority (ANDGA) has awarded a contract to prepare an environmental impact statement (EIS) to URS Corp. for a planned natural gas pipeline in Alaska. If built the 480-mile pipeline will run north from the Beluga gas field located west of Anchorage to Fairbanks, Alaska - with 90 percent following existing rights-of-way and easements. ANGDA's plan calls for 20-inch steel pipeline from the gas field to Delta Junction and an eight-inch plastic pipeline carrying gas from Delta Junction to Golden Valley Electric Association's North Pole power generation plant. If a large diameter gas pipeline is built from Alaska's North Slope the flow direction will be reversed to carry gas south and eventually feeder lines and take-off points will be added to meet Alaska's needs. ANGDA's plan comes after a request from Gov. Sarah Palin that the state authority find a way to get gas to Fairbanks before the North Slope pipeline is built, estimated at the earliest by 2018. [More here]

Post-Hurricane Gas-Line Fixes Slow Return of US Gulf Oil (12/12/2008) Three months after Hurricanes Gustav and Ike, 14.9 percent of Gulf oil output and 21 percent of gas output were still shut as of December 3 awaiting repairs, according to the U.S. Minerals Management Service (MMS). "We had some major impacts to gas transmission lines. That's what we still see, at this point, being the holdup on the gas as well as associated oil," said Lars Herbst, the MMS Gulf Region director, adding, "If you can't get the gas flowing in those transmission lines, the oil associated with that platform is also curtailed or shut in." Burning off gas to facilitate oil production is forbidden by the MMS. Almost all pipeline damage was caused by the toppling of platforms by towering waves generated by the storms. This experience may cause relocation of pipelines and tighter standards on construction of pipeline junction platforms. Herbst said the pipeline breaks affecting TransCanada ANR Pipeline Co.'s Central Gulf Gathering System kept 66,000 barrels of oil per day off line. Natural gas transportation through Williams Transcontinental Gas Pipeline Corp and Southeast Louisiana Lateral pipelines kept an unspecified amount of gas out of production. Herbst did not indentify oil companies whose production is affected by the repairs. [More here]

New Alaska Senator Doubtful on Natural Gas Loan Guarantees (12/11/2008) Alaskan Senator-elect, Mark Begich, said he doubts the U.S. Congress will give additional loan guarantees to TransCanada Corp. to back the company's plan to build a natural gas pipeline from Alaska's North Slope. Although he supports the $18 billion federal loan-guarantee provision that includes an inflation clause, he was "troubled" by reports TransCanada wants additional loan guarantees. Adding the inflation clause to the 2004 legislation "has already increased the loan guarantee by $2 billion over the last four years," Begich said. "In this economic condition the country's in, getting loan guarantees and these kinds of things is very difficult," he said. Last week TransCanada, Gov. Sarah Palin's choice as the project sponsor, was awarded a state license to construct and operate a 1,715-mile natural gas pipeline that will run from Prudhoe Bay to an existing pipeline hub in Alberta. The company estimates the pipeline will cost $26 billion....... [More here]

Striker Oil & Gas Announced Completion of 4-Mile Gas Pipeline on Its Catfish Creek Prospect (12/11/2008) Striker Oil & Gas have finished installing a 4-mile pipeline connecting its gas production from its Catfish Creek Prospect. Pressure testing and final mechanical hook-up were expected to be done in 7-10 days allowing new gas production. Upon completion, the company will own a 25% working interest in the pipeline. [More here]

Pipeline Companies Weather Darkest Hour; Executives Say Crisis Worst in Canada's Oil Patch History (12/9/2008) According to the leaders of Canada's oldest and largest oil pipeline companies, Calgary's energy sector is in the midst of its worse economic decline in its history - even worse than the devastating collapse of the 1980s. Enbridge CEO, Pat Daniel said emphatically, "I think -- no, I won't think -- this is the worst I've experienced in my entire career. When you go from$150 (US) crude to $50, that's the biggest absolute drop in history. This is the worst of the hard times we've ever had . . . I hope we've seen the worst of it, but it's really hard to know." The combination of falling commodity prices and the continuing financial crisis has lead to the oil patch's darkest hour. Hal Kvisle, TransCanada's president, said, "Clearly we're in a 12-to 24-month period of contraction--in everything," he said. "Financial markets are in as difficult shape as I've ever seen them." Even though pipeline companies are usually unaffected by the daily fluctuations of the financial markets, theirr customers are not. Large oilsands producers such as Shell Canada, Petro-Canada, Nexen Inc. and others have delayed major new projects and expansion of existing ones because of the economic uncertainty. Despite the economic turmoil, TransCanada easily sold a $1.16 billion share offering and Enbridge is one of the top performing stocks on the TSX, losing only 1.7 percent year-over-year vs. the TSX main board's 41 percent loss and the TSX's capped energy index loss of 56 percent since June. [More here]

The Alaskan Pipeline - A Wolf in Sheep's Clothing? (12/10/2008) The recent Alaskan gas pipeline license awarded to TransCanada Corp. may have a negative long-term impact on Canada's natural gas industry according to a firm that specializes in evaluating the economic impact of oil and gas reserves. According to Ralph Glass, VP Operations of AJM Petroleum Consultants, said, "While construction of the Alaskan pipeline will likely have a positive impact on Canada's economy in the shorter term, once it is up and running it will make Alaska into a direct and effective competitor for Alberta and British Columbia's natural gas industry. Looking ahead we have to consider the fact that the Alaskan pipeline will increase natural gas volumes in the US market. That could keep natural gas prices low in future years; low natural gas prices will have a significant impact on future drilling here in Canada." Glass recommends Canada reduce its dependency on the US market and aggressively pursue an LNG and oil export terminal on British Columbia's coast to gain access to world markets. [More here]

Palin to Sign State Pipeline License, Giving $500 Million to TransCanada (12/7/2008) Calgary based company TransCanada Corp. has been awarded the Alaska Gasline Inducement Act license (AGIA) to build a more than $30 billion natural gas pipeline to Alaska's North Slope. The license includes up to $500 million in state grants that will pay for up to half the company's costs in preparing for a 2010 open season. Because of the limited time in preparing for the open season, TransCanada's vice president, Tony Palmer, said the company has already started preliminary environment and engineering work as well as taken aerial photographs along two possible routes. He also said the project has not been affected by current difficulties in the financial markets. A rival project - the Denali pipeline - led by BP and ConocoPhillips also plans to have an open season in 2010 to solicit customers. The 1,715-mile pipeline from the North Slope to Alberta, is "huge, but not unprecedented for TransCanada," said Palmer adding the company's legacy pipeline system built across Canada 50 years ago was larger and technically more challenging. The company's Keystone project, currently being built in the continental U.S., will have 4,000 miles of new pipe when completed in 2010. If completed the Alaska project will represent on approximately 5 percent of TransCanada's exiting pipelines. [More here]

Mackenzie Pipeline Going Ahead: Prentice (12/4/2008) Construction of the proposed $16.2 billion Mackenzie Valley Pipeline in the Arctic has faced numerous regulatory delays, negotiations with aboriginal groups and prolonged discussion over fiscal breaks for the lines backers. Despite these setbacks, Canada's Minister of the Environment, Jim Prentice said he is "actually very optimistic because a lot of the work that needed to be done has now been done." Prentice expects to receive a report on the environmental and social impacts of the pipeline between March and May of 2009 and felt the Mackenzie project was now most likely five to six years ahead of the proposed Alaska gas pipeline. The 1,200-kilometer Mackenzie pipeline will transport 1.9 billion cubic feet of gas a day along the Mackenzie River Valley in the Northwest Territories to Alberta, where it will link to existing lines serving U.S. and Canadian markets. It is expected to be in operation by the middle of the next decade. [More here]

U.S. Supreme Court Rejects Pipeline (12/2/2008) ... The U.S. Supreme Court ruled in favor of a decision by the Connecticut Department of Environmental Protection to deny environmental permits necessary for the construction of a 50-mile pipeline crossing Long Island Sound. The court rejected an appeal by Islander East, an interstate natural gas pipeline company, thus forcing the company build the pipeline without crossing the Sound. Connecticut Gov. M. Jodi Rell said in a press release it was and environmental victory not only against this pipeline but also the 2007 Broadwater proposal to build an LNG storage and re-gasification facility in the Sound. “First Broadwater — now Islander East: With today’s Supreme Court announcement, we have succeeded in turning back two ill-conceived energy projects,” she said in a press release. [More here]

Enbridge Gets Go Ahead for Pipeline (11/25/2008) Despite environmental concerns by the Minnesota Center for Environmental Advocacy (MCEA), the Minnesota Public Utilities Commission voted unanimously to approve Enbridge Energy's request to build nearly 1,000 miles of oil pipeline between Alberta, Canada and Superior, Wisconsin. MCEA opposes the project arguing it contradicts Minnesota's goals to reduce green house gas emissions and increase energy efficiency. Enbridge Energy spokesperson, Denise Hamsher, countered that the company had already taken environmental issues into account. "Think about tens of thousands of trucks on Highway 2, the government would have to expand the highway,' she said. "This is a much safer alternative for transporting oil underground. It is not without risk, we wish it would be absolutely risk free, but we do everything we can to reduce that risk and have shown again year after year that pipeline transportation is by far the safest mode of transportation." MCEA representatives said they are investigating other options to stop construction of the pipeline, including taking their case to the court of appeals. [More here]

November 2008 Update

noreply@blogger.com (Deb Harrsch) — Wed, 19 Nov 2008 03:00:00 +0000

In the news...

Study Shows Alaska Holds Another Source of Energy (11/16/2008) The U.S. Geological Survey has determined hydrates found 2,000 feet below Alaska's North Slope contain as much as 85.4 trillion cubic feet of recoverable natural gas. The Department of Energy describes hydrates as "ice-like solids that result from the trapping of methane molecules within a lattice-like cage of water molecules." Advances in techniques used to access more conventional fuel sources may open up the possibility of recovering this potential energy source. Government research shows depressurizing deposits through drilling and other techniques is enough to release natural gas found in the hydrates. Globally "hydrates have more potential for energy than all other fossil fuels combined," according to Interior Secretary Dirk Kempthorne. Large hydrate deposits also exist in the Gulf of Mexico. Along with the estimated 35 trillion cubic feet of proven natural gas reserves, the hydrates could add to the utility and lifespan of the planned natural gas pipeline from Alaska's North Slope. [More here]

Alberta Ranchers Want Moratorium on Proposed Pipeline (11/12/2008) Concerned about a proposed Petro-Canada pipeline running through Kananaskis County, Alberta, local ranchers are seeking a moratorium on oil and gas development. Petro-Canada is applying to build a 56-kilometer (35-mile) pipeline and drill 11 sour gas wells on the Southeastern slopes of the Canadian Rockies. "The potential impact of this pipeline goes far beyond the miles of trenches. Everywhere a pipeline has been built, it's been followed by weeds, motorbikes, ATVs, trespass, clearcuts, more wells, more roads, and more industrialization," said Mac Blades, president of the Pekisko Group (a group of local families who view themselves as stewards of the land). Currently the area is inaccessible to vehicles. The group is also concerned about possible damage to the 72 water courses in the Willow Creek and Pekisko Creek drainage areas which are home to Alberta's provincial fish, the Bull Trout - considered a "species at risk" by the Alberat Ministry of Sustainable Resources and Development. Hearings on Petro-Canada's application began on November 12 in High River. [More here]

$40 Million Going into Ethanol Project (11/11/2008).. Kinder Morgan Energy Partners (KMEP) will begin shipping ethanol through a 106-mile Florida pipeline running from Tampa to Orlando starting mid-November. As many as 40 fuel trucks a day will be eliminated from area highways and transportation savings will be approximately 3 cents per gallon. So far the company has spent $30 million on improvements to facilities and equipment located in Tampa and Orlando. KMEP also spent another $10 million on fortifying the existing gasoline pipeline to enable it to transport the more corrosive ethanol. “This sets the precedence for pipeline ethanol distribution,” said Bradley Krohn, president of U.S. EnviroFuels LLC in Riverview. “I don’t know of it being shipped through pipeline distribution anywhere else in the U.S. now.” [More here]

Enbridge Expansions to Go Ahead Despite Falling Oil Prices, Credit Crunch (11/5/2008) Pat Daniel, Enbridge Inc. CEO, said plans for $12 billion in pipeline projects will not be derailed by distressed financial markets and declining oil prices. The company had a 90-percent increase in third quarter earnings thanks to some major projects entering service earlier this year. "This increase in earnings is primarily due to the progress that we've made on our first wave of liquids pipeline projects," said Danial, adding, "Wave 1 projects are commercially secured and under construction and this drop in crude prices will in no way affect their in-service dates or their earnings profiles once they're placed into service." He went on to caution it was too early to know if Enbridge's Wave 2 projects, worth $15 billion, will be affected by current market conditions. However, Daniel remains optimistic the expansions will begin construction in 2012 and beyond. "Just as producers didn't use $150 a barrel as a planning benchmark during the price run up earlier this year, we're probably not going to be using $65 per barrel crude oil long term... In a lot of ways these longer-term projects make even more sense," Daniel said. [More here]

Flint Announces Oilsands Pipeline Maintenance Contract Award (11/3/2008) FT Services, a 50 percent-owned Flint Energy Services Ltd. joint venture, has been awarded a C$12 million, 2-year contract to provide pipeline maintenance services for Canadian Natural Resources Ltd's Horizon Project near Fort McMurray, Alberta. "This new contract builds upon our current maintenance capabilities with Canadian Natural and excellent performance to-date," said Andy Mackintosh, President and CEO, FT Services. "The addition of the pipeline maintenance work demonstrates our capabilities and growing relationships with our customers in the Fort McMurray oil sands region." Between 50 and 60 personnel will be employed by FT Services to do pipeline maintenance services starting in mid-December. [More here]

B.C. Pipeline Bombings May Not Be Eco-terrorism: Says Expert (11/3/2008) According to University of Alberta sociology researcher, Paul Joosse, extreme frustration over property rights and sovereignty - and not environmental radicalism - is likely the reason behind three recent attacks on a natural gas facility in northeast British Columbia. "This person, I would say, is ensconced in their own local struggle and probably started to use these tactics after being frustrated for years in their community with a lack of success at getting results." The first two attacks targeted a natural gas pipeline running south of Dawson Creek, B.C. on the Alberta border. The most recent bombing occurred at a natural gas wellhead operated by Encana Corp. in the same area. Joosse a PhD student whose research focuses on radical environmental groups including EarthFirst! and the Earth Liberation Front (ELF), said the Dawson Creek bomber profile doesn't fit that of the typical "eco-terrorist." Groups like ELF tend to focus their efforts on more expansive issues like clearcut logging, are quick to broadcast their affiliation and even offer manuals on how to place incendiary devices to achieve maximum damage said Joosse. Except for an unsigned handwritten letter warning Encana to close its operations and to leave the area no public attention has been sought. Furthermore, Sgt. Tim Shields of The Royal Canadian Mounted Police said police believe they are dealing with a local person, or group of people, "because of their familiarity with the community as well as a knowledge of oil and gas." So far, the blasts have done minimal damage and no one has been injured. Encana released a statement saying crews had sealed "a small leak" by injecting cement into the damaged wellhead. [More here]

Alliance Pipeline Receives FERC Waiver Approval (10/30/2008) The Federal Energy Regulatory Commission (FERC) approved a revision to Alliance Pipeline LP's tariff allowing the company to waive a gas quality specification on "a first come, first served basis". Consequently, EOG Resources, Inc. subsidiary, Pecan Pipeline Inc., can now flow dense phase rich gas outside the liquefiable hydrocarbon specifications currently found in Alliance's FERC Gas Tariff. "The FERC's decision shows a strong commitment to swiftly and effectively develop North Dakota's natural gas resources by utilizing existing infrastructure," said Murray Birch, president and chief executive officer, Alliance Pipeline. "We are very pleased, and appreciative of, the support we received for this application." [More here]

TransCanada Boosts Keystone Stake, Profit Rises (10/28/2008) TransCanada Corp has increased by almost 30 percent its stake in the $12 billion Keystone pipeline project and despite the global credit crisis expects to have financing in place by the end of the year. The other stakeholder in the project - ConocoPhillips - now holds only 20.1 percent. However, TransCanada said it will give other shippers an opportunity to acquire up to a 15 percent stake in the project. The $5.2 billion first phase of the of pipeline running to Illinois and Oklahoma is expected to be in service next year and will carry 590,000 barrels per day (bpd) of oil. Keystone's $7 billion second phase is will carry another 500,000 bpd of oil to refineries based on the Gulf Coast and is expected to be completed by 2012 or 2013 at the latest. TransCanada's also reported profits increased by 20 percent in the third quarter. [More here]

Engineer Pitches Denali Pipeline (10/24/2008) ................. Since announcing their intention in April to build a private natural gas pipeline from the North Slope to the continental U.S., BP and ConocoPhillips have have spent $40 million on summer field work. Speaking at an Anchor Point, Alaska Chamber of Commerce luncheon, John White, an engineer with BP said, "We've got a team mobilized and it's growing every day. I'd say we have the critical mass to actually get the project started." He went on to say that the proposed Denali gas line will follow the Trans Alaska oil pipeline to the Delta Junction, at which point it will then follow the Alaska Highway crossing the Alberta border into Canada and connecting with existing infrastructure in Alberta. In total, the pipeline will travel around 2,000 miles and require 2 million to 3 million tons of steel. Most of the steel will have to be produced overseas as the U.S. currently does not have the manufacturing capacity to make the pipe. The project may also add another 1,500 miles of pipeline traveling from Alberta to the U.S. The pipeline will transport 4 billion cubic feet per day (cfpd) of natural gas or approximately 7 percent of U.S. daily consumption. The project consists of four phases - the first phase will be an open season targeted for 2010, with filing of applications for permits by year end, followed by development of detailed designs during the permit approval process. The third phase involves equipment and material contracts. The fourth and final phase will need five years - a year for material procurement, a year for mobilization, and three years for construction. "That sounds like a long time, but that is a tight timeline," White said adding "It's all about regulatory process and how fast that goes." Although Denali is competing with TransCanada Corp.'s pipeline proposal, White said he thinks the two projects will combine. "Ultimately, there can only be one pipeline," White said. [More here]

Enbridge Mulls Pipeline Stake for Native Groups (10/24/2008) In order to gain support for its proposed Northern Gateway oil sands export pipeline, Enbridge Inc. may offer aboriginal groups an equity stake in its 525,000 barrels-per-day pipeline. Details have yet to be decided on the size of the stake to be offered to native communities residing along the pipeline's route from Edmonton, Alberta to Kitimat, British Columbia, as well as how to finance the stakes have yet to be decided. Another project - the C$16.2 billion Mackenzie Valley natural gas pipeline - by Imperial Oil has included native groups as a partner (the Aboriginal Pipeline Group) since 2000. However, the Mackenzie project still has not been constructed due to regulatory delays and cost overruns. The Northern Gateway pipeline is estimated to cost more than C$4.5 billion and is expected to be completed by early 2015. [More here]

Plateau Mineral Development, Inc. Announce Building of a Pipeline to Produce Significant Revenues (10/21/2008) Plateau Mineral Development, Inc, (PMD) and its partner Plateau Mineral Development LLC. has completed a 6.16-mile long pipeline with a six-inch and four-inch main trunk line which in turn are fed by an additional four miles of two-inch pipeline. The pipeline system, located in Morgan County, Tennessee, is capable of gathering and delivering 300,000 cubic feet of natural gas per day from twelve gas wells to a PMD Compressor Station that feeds gas into the 24-inch east-west SPECTRA high-pressure main pipeline Further expansion of the pipeline will allow production from fields that have been shut in for more than 20 years. Robert Matthews, President of Plateau Mineral Development, said, "This pipeline is a major step towards increased revenue for our company. We look forward to reaping its benefits." [More here]

October 2008 Update

noreply@blogger.com (Deb Harrsch) — Thu, 16 Oct 2008 17:30:00 +0000

In the news...

Legislators Take Aim at Interior Alaska Gas Bullet Line (10/13/2008) A proposal to build an Alaskan in-state natural gas pipeline has gained new support from Alaskan legislators. Increasing energy costs and air quality concerns have spurred the renewed interest. Possible routes for the "Bullet Line" include a line from the North Slope, which already is producing gas, or the foothills, where Andarko Petroleum Corporation is exploring new reserves, to Fairbanks, AK. Between September 30 and October 1, Alaskan Legislators joined Endstar Natural Gas Company executives in examining possible routes on a trip to northern Alaska. "I'm even more convinced that the Bullet Line gives us an opportunity to jump-start first gas for Alaskans," said Rep. Mike Kelly, a Fairbanks Republican. "We'll have gas sooner, we'll be ready for the big line and we'll have a trained Alaskan work force, I saw nothing but positives. Enstar company spokesman, Curtis Thayer said Enstar has committed $15 to $20 million for preliminary work on a route next year. He added Enstar is interested in working with the state but wants an "independent analysis" of the two suggested routes. Earlier this year, Gov. Sarah Palin announced the Alaska Natural Gas Development Authority, the state and Enstar would work together on developing an in-state line. [More here]

Natural Gas Pipeline Approved (10/10/2008) ............ ...... On September 18, the Federal Energy Regulatory Commission (FERC) voted 4 - 1 in favor of plans by NorthernStar Energy LLC to build a liquefied natural gas terminal at the Bradwood site on the Columbia River and a 36-mile pipeline connecting Bradwood with an existing natural gas system owned by Northwest Pipeline Corp., near Kelso, Washington. The plan was opposed by Oregon's Governor Ted Kulongoski, local tribes and environmental groups, who are concerned about the facility increasing river temperatures. Legal counsel for the Columbia Riverkeeper, Brett VandenHeuvel, said “Salmon are already struggling because of the heat increase in the Columbia River,” he said. “We are spending millions of dollars every year restoring salmon habitat in the estuary, and this project would degrade it.” The group is currently working with other industries along the river to minimize their impact on the salmon runs. The four FERC commissioners voting in favor of the project did so based on the findings of the environmental impact statement and the increased demand for natural gas in the region. In 2009, NorthernStar Energy plans to start construction and be operating by 2012. [More here]

Northwest Gas Line to Run South of Idaho's Southern Border (10/8/2008) El Paso Corp. executives Richard Wheatley and Daniel Gredvig said plans to build a 680-mile natural gas pipeline from Opal Hub, Wyoming to Malin, Oregon are on the "fast track". The 370 miles of the $3 billion pipeline will travel through Nevada on its route from Wyoming to Oregon and is the first pipeline to transport gas west from the Rocky Mountain gas fields located in Wyoming, Colorado, Utah and New Mexico. Currently, all other existing or planned pipelines travel in an eastward direction. "This provides benefits for Rocky Mountain gas producers as well as western end users," said Wheatley. The company hopes to have FERC and other permitting completed by 2009 with an operational date starting March 2011. [More here]

Billion Here and a Billion There - Gas Pipeline Total Escalates In Political Debate (10/4/2008) Six years ago the proposed natural gas pipeline running from Alaska's North Slope to the lower continental U.S. was expected to cost $20 billion. As recently as around a year ago, ConocoPhillips estimated the cost to between $25 billion and $42 billion. While in January TransCanada, the company partnered with the state to build the pipeline, said it will cost $26 billion to get the pipeline to Alberta. However, by this summer, consultants for the state pegged the price at $31 billion. Now Gov. Sarah Palin has raised the price to nearly $40 billion. During the Vice-Presidential debates, Gov. Palin said, “We’re building a nearly $40 billion natural gas pipeline, which is North America’s largest and most expensive infrastructure project ever to flow those sources of energy into hungry markets.” Factors causing the large discrepancies in price include uncertain material costs and major tax and regulatory issues which have yet to be worked out. Only after the entire pipeline is completed will the true cost be known. [More here]

Grand Prairie Sued Over Gas Line Ordinance (10/2/2008) ... In the first lawsuit of its kind, Chesapeake's subsidiary, Texas Midstream, is suing Grand Prairie over an ordinance passed by the city to oversee the placement of equipment used to push natural gas through pipelines. This is the first time the company has taken a city to court over pipeline regulation. Grand Prairie's city council says it wants to protect its citizens and has the right to decide what a natural gas pipeline operator does in its city. Texas Midstream says pipeline safety is controlled by federal and state authorities, not cities. Attorney Jim Bradbury and Forth Worth's Natural Gas Drilling Task Force member said, "You might believe that the city could and should protect you, but it may in fact be true that they can't. We can do this our way whether you want us to or not." But Bradbury added, he hopes to find a legal solution that protects the rights of citizens and industry. [More here]

Exxon Quits 2nd-biggest U.S. Gas Area Amid Price Drop (10/2/2008) Exxon Mobile Corp. has sold its stakes in gas fields and an 80-mile pipeline located in the second-largest U.S. natural gas region, Texas' Barnett Shale, to Dallas-based Harding Energy Partners LLC which had formed a joint venture with Exxon in 2006. Harding then sold the gas fields and pipelines to Chesapeake Energy Corp. Exxon cited a supply glut slashing the value of natural gas in half over the past three months as the reason for the sale. Exxon spokesman Patrick McGinn said the company "has a long-standing practice of continually reviewing all assets for their contribution to the company's operating needs and financial objectives, as well as their potential value to others." Details on the terms of the transaction were not disclosed. [More here]

Another Pipeline Wouldn't Help, Officials Say (10/1/2008) Pipeline officials said a third pipeline running from Louisiana to Cobb County would not have prevented hurricane-induced gas shortages like Ike and Gustav did in the Atlanta, GA area. Last year, Colonial attempted to get approval from Georgia's legislature for the fast-track construction of 460-mile $2 billion pipeline, stating a third line will remove a bottle-neck between Houston and New York. The bill, which would have eased the permitting process was defeated on grounds it would erode property rights and evade environmental scrutiny. “Right now, the third line would not matter; we’re pumping everything we can get,” said Sam Whitehead, a spokesman for Colonial, headquartered in Alpharetta, GA. “This is a refining problem, not a pipeline capacity problem. On the gasoline line, we’re at pre-hurricane rates.” Currently, Colonial has two 36-inch pipelines that can deliver 100 million gallons of fuel a day to the Eastern coast but are operating at less than 85 percent capacity. One pipeline only transports gas and the other aviation fuels, diesel, heating oil and other products. The proposed third pipeline which Colonial still hopes to get approved and operating by 2012, will increase Colonial's capacity to 135 million gallons a day. [More here]

Global Industries, Ltd. Awarded $75 Million Pipeline Project in PEMEX's Bay of Campeche Ixtal Field (9/29/2008) Global Industries, Ltd. has been awarded a $75 million project from Pertroeos Mexicanos (Pemex) for over 12 km of 24" pipeline. The project consists of several pipeline crossings, riser and expansion curves in Pemex;s Ixtal Field in teh Bay of Campeche. B.K. Chin, Global's Chairman and Chief Executive Officer, stated, "We have a close working relationship with PEMEX, and have been active in the Ixtal Field for well over a year. The award of this project demonstrates PEMEX's confidence in Global as a reliable contractor and solutions provider."[More here]

Southern California Company Fined for Offshore Gas Shipment (9/29/2008) Pacific Operators Offshore LLC of Carpinteria, CA was fined $450,000 and placed on five years' probation after pleading guilty for transporting natural gas through a pipeline deemed unfit for service off the Southern California. In 2002, U.S. Department of the Interior officials said inspectors discovered the company was transporting natural gas through the pipeine even though Pacific Operators were notified in February 2000 that the line was unfit for service. Charles Cappel, the company's legal counsel, said two of its employees "on limited occasions" sent low and medium pressure natural gas through the pipeline engineered to handled higher pressures. He said, "The action was totally against company policy. They didn't tell anyone what they were doing." After the company learned what happend officials agreed to pay the fine. The pipeline goes to offshore platforms that are no longer operated by the company. [More here]

Energy Solutions Completes the Oil & Gas Supply Chain with Its PipelineTransporter Gas (PLTG) Solution Certified for Integration with SAP® Solutions (9/24/2008)Energy Solutions International, Inc. a world-leading supplier software for the gas and oil pipeline industries has received SAP® Certified Integration status for the interface between its PipelineTransporter® Gas (PLTG) software, version 4.0 and the SAP® ERP application. "EnergySolutions' customers include many of the world's leading oil and gas transportation companies," said Dr. Jo Webber, chief executive officer, Energy Solutions International. "Increasingly, over the last few years we have seen many of our customers select and implement SAP solutions for their full ERP requirements. In order to provide a full end-to-end integrated solution, from product flow to final invoicing, we are pleased to announce the SAP certified interface between PLTG 4.0 and SAP ERP." PipelineTransporter is an intuitive, nomination, scheduling, allocation and invoicing system that integrates shipper information with critical pipeline and business data to manage the commercial aspects of a pipeline. [More here]

Shell Hopes to Reroute Auger Pipeline in US Gulf (9/22/2008) In an effort to restart its Central Gulf gathering system, Shell Oil said it hopes to reroute natural gas and oil flows through its Auger pipeline in the Gulf of Mexico around the Eugene Island platform damaged by Hurricane Ike. "Plans are in development to reroute the Auger pipeline system around the damaged Eugene Island 331 Platform," Shell said in a press release. "Work is progressing to restart the Central Gulf gathering system." The Auger pipeline system can transport 415 million cubic feet of gas per day (cfd) and more than 100,000 barrels per day (bpd) of oil. Almost 80 percent of the Gulf of Mexico's 1.3 million bpd of crude and 65 percent of its 7.4 billion cfd of natural gas production remains shutdown. The company said its Boxer, Cougar and Eugene pipeline systems remained down until repairs can be completed. [More here]

Hurricane Ike: The Aftermath (9/19/2008) ..... ............ ... ... After shutdowns caused by hurricanes Gustav and Ike offshore oil and gas operators are re-staffing their installations. According to the federal government, almost 90 percent of oil and over 75 percent of natural gas production was off-line as of September 19, 2008. Start up had been delayed by required inspections and testing subsea pipelines. Interior Department's Minerals Management Service (MMS) spokeswoman, Eileen Angelico, said oil pipelines need some production running to induce the pressure required for testing while natural gas pipelines are able to keep pressure when shut down. Despite the shutdowns, the Southeast Texas gasoline suppy was sufficient to avoid releasing emergency stockpiles. "Producing platforms in the Gulf now seem generally to have fared well, as did other infrastructure," said Paris-based International Energy Agency. Hurricane Ike has destroyed 49 platforms in the Gulf of Mexico that are responsible for producing approximately 13,000 barrels of oil and 83 million cubic feet of gas per day. The normal daily output for the region is 7.4 billion cubic feet of gas and 1.3 million barrels of oil. [More here]

September 2008 Update

noreply@blogger.com (Deb Harrsch) — Tue, 16 Sep 2008 02:15:00 +0000

In the news...

Ike Destroys Oil Facilities, Damages Pipelines (9/14/2008) According to federal officials, Hurricane Ike seems to have destroyed at least 10 out of approximately 3,800 production platforms and damaged numerous pipelines in the Gulf of Mexico. “It’s too early to say if it’s close to Katrina- and Rita-type damage,” said Lars Herbst, regional director for the U.S. Minerals Management Service. Based on initial assessments it appears the damage is much worse than that done by Hurricane Gustav. Areal inspections revealed several large pipelines were damaged but at this time it is unknown how badly they are damaged. For more than two weeks now, almost 100% (about 1.3 million barrels per day) of Gulf Coast crude production has been stopped while 98% of all natural gas production is on hold after the passage of Hurricanes Gustave and Ike. With more than half of Texas' refineries being shut down by Ike, some areas of the country have seen the cost of a gallon of regular gas rise past $5 per gallon. [More here]

Colonial Says Oil Product Pipelines Shut Due to Ike (9/12/2008) Colonial Pipeline - the nation's largest operator of pipelines for refined petroleum products - has shut down their main gasoline line between Houston and New York. The action was taken after supplies from Gulf Coast refineries have slowed or stopped ahead of Hurricane Ike. In addition, the company's distillate pipeline has also been shut down. Up to 2.3 million barrels of refined products flow through Colonial's pipelines each day. [More here]

Congressmen Show Pipeline Support (9/12/2008) Senators Tom Harkin - (D-Iowa), and Richard Lugar - (R-Indiana) have introduced legislation that may spur the feasibility of ethanol pipelines. If passed, the Biofuels Pipeline Act of 2008 will give pipeline owners who transport ethanol the same tax benefits as those received by operators who move petroleum based products. Current tax law for publicly traded partnerships (PTPs) requires they earn 90% of their income from the exploration, transportation, storage or marketing of oil, gas and coal. Renewable fuels are currently excluded from the law. Congressmen Leonard Boswell - (D-Iowa), and Lee Terry - (R-Nebraska) are also seeking to amend the Energy Policy Act of 2005 with the introduction of the Renewable Fuel Pipeline Act - that provides loan guarantees on the construction of renewable pipelines. [More here]

DCP Midstream Partners to Buy Michigan Pipeline & Processing for $145 Million (9/11/2008) Oil and gas pipeline company DCP Midstream Partners, LP has finalized a deal for the 100% buyout of Michigan Pipeline & Processing, LLC (MPP) for $145 million. MPP's holdings include MPP Antrim Gas, MPP Bay Area Pipeline, MPP Grands Lacs Holding, MPP Jackson Pipeline, and MPP Litchfield Pipeline. "This acquisition allows us to further diversify our operations in a new geographic area while adding 100% fee-based revenues to our contract mix," said Mark Borer president and CEO of DCP Midstream........ [More here]

TransCanada (NGTL) and Canadian Utilities Limited (ATCO Pipelines) Subsidiaries Reach Proposed Agreement to Provide Alberta Natural Gas Transmission Service (9/8/2008) Canadian Utilities Ltd's indirectly wholly owned subsidiary, ATCO Pipelines, and TransCanada Corporation's wholly owned subsidiary, NOVA Gas Transmission Ltd. (NGTL), have agreed to a proposal that will provide uniform natural gas transmission service to customers across Alberta. The seamless pipeline transmission model has been promoted by regulators and, if approved, will combine the two companies' physical assets into a single rates and services structure. Customers will deal with a single commercial interface, but each company will manage their assets within distinct operating territories in the province. More efficient regulatory processes are expected through the elimination of duplicate operational activities and tolling. [More here]

Range Resources Pipeline Progresses Ahead of Schedule (9/8/2008) Range Resources Corp.'s Marcellus Shale pipeline and processing build-out is ahead of schedule by a full quarter. Originally targeted for completion in the first quarter of 2009, year-end production for 2008 is expected to reach 30 million cubic feet equivalent per day (MMcfe/d). Eventually pipeline capacity is expected to increase to more than 300 (MMcfe/d). “Our solid drilling results coupled with the faster than expected Marcellus Shale ramp up and the pipeline constraint resolution in the Barnett Shale give us significant momentum for the remainder of 2008 and into 2009,” said Range Resources' CEO John H. Pinkerton. [More here]

North Dakota Oil Pipeline Capacity Limited as Production Imports Climb (9/4/2008) According to Federal Energy Regulatory Commission (FERC) Chairman Joseph H. Kelliher, North Dakota crude oil production and imports from Canada exceed current pipeline capacity in the region. "Both domestic and Canadian crude oil production are increasing, exacerbating the competition for limited pipeline capacity. There have been additions to pipeline takeaway capacity in the region, not enough to limit constraints or accommodate future increases," he told a U.S. Senate subcommittee. Although FERC supports the development of energy infrastructure, Kelliher said. "The parties themselves must resolve who will commit to support the development of new infrastructure and who is willing to pay for it." Oil production in the state rose from 125,000 barrels per day (b/d) to 147,000 b/d in March 2008. In addition Canadian oil imports increased 3% last year to 1.86 million b/d and are projected to 3.4 million b/d by 2017. Oil imported from Canada accounts for 20% of all U.S. crude supplies and is the largest foreign source. [More here]

Enbridge Commences Construction of Alberta Clipper Expansion Project (8/27/2008) Enbridge Inc. has begun mainline construction on the Canadian portion of the Alberta Clipper Expansion Project near Hardisty and Provost, Alberta. It has also started construction on facilities located in Hardisty, Milden Saskatchewan and Cromer, Manitoba. "The Alberta Clipper pipeline is the largest expansion project in Enbridge's history and demonstrates our commitment to accelerating energy delivery throughout North America. Together with our Southern Access project, Alberta Clipper will ultimately deliver an incremental 1.2 million barrels-per-day from Alberta to Eastern Canadian markets and U.S. refineries throughout the Midwest, the mid-continent and the U.S. Gulf Coast", said Al Monaco, Executive Vice President, Major Projects, Enbridge Inc. When completed, the 1,000-mile 36-inch diameter pipeline running from Hardisty to Superior, Wisconsin in the U.S.will have an initial capacity of 450,000 barrels-per-day (bpd) with the ability to expand capacity to 800,000 bpd. It is scheduled to be in service by mid-2010. [More here]

Canada's Harper Still Optimistic on Mackenzie Gas (8/27/2008) Canadian Prime Minister Stephen Harper said he is optimistic the proposed $15.4 billion Mackenzie gas project in the Arctic will happen despite years of delays. "I'm optimistic that in the not-too-distant future this project will come to fruition," Harper said in Tutohaktuk a small Arctic village near the Mackenzie River and Beaufort Sea. "It is ultimately about opening up a region of the country in a way that it has not been opened up before and of establishing our economic reach and sovereignty in a way it has never been done before." If completed, the Mackenzie pipeline will transport up to 1.9 billion cubic feet per day of natural gas traveling 750 miles from the Mackenzie River valley in the Northwest Territories to the Alberta border. The pipeline is estimated to be in operation at the earliest around 2015. [More here]

A Map Of U.S. Crude Oil Pipelines and Infrastructure Is Now Available: Including Over 150 Crude Oil Pipeline Systems (8/27/2008) Marketing research company -- Research and Markets Ltd. -- has added the "U. S. Crude Oil Pipelines and Infrastructure Wall Map" to its product offerings. The full color map includes information on over 150 crude pipeline systems, oil producing field locations, crude refinery locations, oil seaport locations, petroleum power plants, offshore lease blocks, oil & gas basins and Petroleum Administration For Defense Districts (PADD). The 60" x 42" map sells for 168 Euros. [More here]

Microorganisms that Convert Hydrocarbons to Natural Gas Isolated (8/20/2008) University of Oklahoma researchers have isolated a community of microorganisms that can convert hydrocarbons into natural gas through a groundbreaking process known as anaerobic hydrocarbon metabolism. Researchers believe the microorganisms may be involved in problems ranging from the deterioration of fuels to the corrosion of pipelines. These microorganisms can grow inside pipelines because of the presence of water, that often accompanies hydrocarbons pumped from the ground, resulting in biocorrosion and biodeterioration. “We think cells grow in communities that adhere to the inner surface of pipelines and form three-dimensional biofilms that can sometimes cause pitting. Once we understand what these microorganisms are doing, we can interrupt their processes or diagnose them more effectively. The science is rudimentary at this stage. The modern tools of molecular microbiology have not been applied yet, but a National Science Foundation grant, support from the DOE’s Joint Genome Institute and the cooperation of the energy industry, allowed us to study pipeline biocorrosion on the North Slope,” said Joseph Suflita, Director of the Institute for Energy and Environment within the Mewbourne College of Earth and Energy. Conversely, the microorganisms have an upside as well. They can be used to stimulate methane gas production from more mature oil reservoirs like those found in Oklahoma. [More here]

Pipeline Threat Covers Tri-State (8/17/2008) A 5,000-barrel oil spill from Marathon Oil Company's 20-inch interstate transit line on a remote farm field in Wayne County, Illinois appears to have had minimal impact on the environment. Oil erupted from a pipeline buried 4 feet underground covering a three-acre area. Illinois EPA spokeswoman, Maggie Carson said, "It was more or less an explosion because it was under pressure, so it covered a large area. It went into farm fields and some areas where it was not immediately accessible. Considering the geographic area covered, this appears fairly minimal, but the agencies involved will conduct a formal damage process." Although the spill was located in a remote location this time, it is probable a leak in will eventually occur in a more populous area as developers increasingly build next to pipelines. A network of oil and gas pipelines crisscrosses the U.S. with high densities in the central and eastern states. According to federal records, there have been 5,894 spills since 1988 releasing nearly 3 million barrels of petroleum products and resulting in more than $3.8 billion in property damage. [More here]

August 2008 Update

noreply@blogger.com (Deb Harrsch) — Wed, 13 Aug 2008 16:55:00 +0000

In the news...

TransCanada's Alaskan Pipeline Proposal Wins License to Build (8/13/2008) Alaskan lawmakers awarded TransCanada a license to begin building the $25 billion Alaska Pipeline Project. The Alaskan Legislature also approved House Bill 3001 that authorizes the state government to provide TransCanada with up to $500 million in funding from the Alaska Gasline Inducement Act (AGIA) to be spent on pre-construction costs. Governor Sarah Palin a key proponent of the license and bill, proclaimed, “This is an historic day in Alaska. Today, with the affirmative vote of both chambers of the Alaska State Legislature, we now begin a lifelong partnership with a company that has shown its true commitment to Alaska’s future.” The license authorizes TransCanada to develop and construct a 48-inch diameter 2,700 km (1,680 mile) natural gas pipeline from Prudhoe Bay in northern Alaska to link with another pipeline grid in northwest Alberta. “The Legislature’s decision represents a significant milestone in advancing this major natural gas pipeline project to connect stranded U.S. natural gas reserves to Alaskan and Lower 48 consumers,” said Hal Kvisle, TransCanada’s president and CEO. Lawmakers who voted against the license expressed more confidence in the competing Denali Pipeline project spearheaded by BP and ConocoPhilips. TransCanada hopes to have the pipeline in service by September 2018. [More here]

U.S. Refinery Operations Status: Marathon Shuts Down Pipeline to Kentucky (8/12/2008) Marathon spokesman Robert Calmus said a 20-inch oil pipeline that runs from an oil hub based in Patoka, Illinois to Owensboro, Kentucky had to be shutdown because of a leak detected early Sunday morning. Operations at the company's Catlettsburg, Kentucky refinery had to be cut as a result. Approximately 4,000 barrels of oil spilled onto a farm located in Illinois. Calmus went on to say the company is analyzing and replacing the failed hardware but did not know when repairs will be completed. [More here]

U.S. Green Groups Target Keystone Oil Pipeline (8/8/2008) Environmental groups - the National Resources Defense Council, the Dakota Resources Council and Dakota Rural Action - filed suit in the U.S. District Court in Washington D.C., against Secretary of State Condoleezza Rice, the Department of State and Reuben Jeffery undersecretary of state for economic, energy and agricultural affairs over TransCanada's and ConocoPhillips' planned $5.2 billion Keystone oil pipeline system. The groups state in the suit the defendants did not comply with the U.S. National Environmental Policy Act (NEPA) prior to receiving a presidential permit that allows the pipeline to cross the U.S.-Canadian border into the U.S. The act requires an assessment of all reasonable foreseeable environmental impacts from the pipeline before being granted the permit. The groups claim the project will promote refinery expansions, causing increased greenhouse gas emissions as well as more air and water pollution in the Midwest and surrounding states. The environmental groups are requesting the court force the State Department to rescind the presidential permit. The 2,148-mile pipeline is expected to be completed in 2009 and will transport up to 590,000 barrels of oil a day from Canadian oil sands to the U.S. Midwest. [More here]

Man Gets 13-Year Term for Plotting Pipeline Blast (8/8/2008) Canadian Alfred Heinz Reumayr was sentenced to 13 years in prison for planning a series of explosions along the Trans-Alaska oil pipeline to disrupt the oil supply. "His motivation in doing it was to play the futures market so that after the pipeline blew up and the price of oil increased he could make whatever profit on it," Assistant U.S. Attorney Steve Yarbrough said. "That shows, at least in his mind, that it was going to be a significant enough impact to affect the financial markets in a way that he would enrich himself." Reumayr, 58, who has been in U.S. custody since August 1999 pleaded guilty in March to one count of terrorism transcending national boundaries. [More here]

New 'Voyager' Company to Explore Natural Gas Midstream Opportunities (8/7/2008) Tenaska Capital Management, LLC (TCM) has formed a Houston-based company - Voyager Midstream LLC - focused on acquiring, developing and managing midstream natural gas industry assets including gathering systems, processing plants, pipeline transportation and gas storage facilities. Dr. Tom Shaw, who has a Ph.D. in geology and 15 years experience in oil and gas exploration and production as well as 6 years developing natural gas facilities will head the new company. [More here]

Lease Dispute May Cloud Exxon Role in Alaska Pipeline (8/7/2008) Although ExxonMobil Corp. has an unresolved dispute over revoked Point Thompson drilling leases. It is ready to work with the Alaskan government and three other companies competing to build a natural gas pipeline to bring natural gas from Alaska's North Slope. "We are ready to work with the state, TransCanada, ConocoPhillips and BP to move forward one of the largest and most complex projects ever undertaken in the United States," Exxon spokeswoman Margaret Ross said. The state revoked Exxon's Point Thompson leases in 2006 because, after decades of control, Exxon on its partners failed to put them into production as required by the lease. Exxon believes Point Thompson could produce 1 billion cubic feet per day (cfpd) of natural gas by 2014 if a $1.3 billion plan for drilling moves ahead next year. Two competing natural gas pipeline projects -- BP and ConocoPhillips' Denali Alaska Gas Pipeline and TransCanada's state-backed Alaska Pipeline project -- are vying for Exxon's support. Without Exxon's support, the pipeline project is unlikely to succeed since they have the most gas leases on Alaska's North Slope. "The fact that Exxon has yet to commit to one project or the other is perfectly reasonable and not at all unexpected from them at this early stage, but we want to see them make tangible commitments sometime in the near future," said Kurt Gibson, deputy director of the Alaska Division of Oil and Gas. He added that Exxon's litigation with the state over the leases is likely a factor in the company's delay in taking a position on the pipeline but the state treats them as separate issues. Exxon, after suing the state in December 2006, said gas supply from Point Thompson would be critical to a natural gas pipeline and the outcome from the litigation could affect an agreement for the pipeline. [More here]

Pipeline Project Proposed to Push Shale Gas (8/7/2008) Denver-based DCP Midstream Partners LP and Houston-based M2 Midstream LLC, have agreed to pursue the development of a natural gas pipeline from Haynesville Shale in Louisiana. The pipeline - diameter to be determined by customer demand - will start at the western side of DeSoto Parish and go 150 miles to a hub located in Delhi. If built, the pipeline could start deliveries as early as the third quarter of 2009 with a capacity of 1.5 billion cubic feet per day by the beginning of 2010. [More here]

Expansion of Pipeline Stirs Concerns Over Safety (8/4/2008) A record 4,400 miles of new pipeline will be constructed in the U.S. this year, carrying 47 billion cubic feet per day of natural gas, a lot of it crossing very populous and environmentally sensitive areas. Much of the boom is driven by the need to distribute a growing domestic supply of natural gas and an increasing reliance on electricity generated from gas (20% of all U.S. electricity in 2006 versus 13% a decade ago). However, construction of highly pressurized pipelines near residential areas and farms has raised fears about safety and the environment. While facing relatively little opposition in rural areas, companies that build pipeline are seeing more lawsuits, eminent-domain battles and jurisdictional disputes between local, state and federal authorities overseeing the projects. "The greatest need is in the most densely populated areas, which in turn are the most challenging places to site infrastructure," said Robert Cupina, principal deputy director of the Federal Energy Regulatory Commission. Several projects have been blocked due to concerns about accidents, like the rupture of a natural gas pipeline near Carlsbad, N.M. in August 2000 that killed 12 campers, and environmental issues such as potential groundwater contamination and disruption of plant and animal life on the surface. Projects in the Northeast typically have the most difficulty getting approval. Local authorities in northeastern Massachusetts thwarted efforts by El Paso Corp. to build a 7.8-mile pipeline and Connecticut rejected on environmental grounds the Islander East plan to build a 50-mile pipeline across Long Island Sound. While companies seek to avoid conflict by building in existing rights-of-way (e.g. along old railroads), invariably projects encounter problems associated with suburban sprawl. [More here]

Willbros Announces New Project Awards (7/29/2008) Willbros Group, Inc. has been awarded contracts to build an expansion to Enbridge Pipelines Inc.'s Canadian Mainline Pipeline Project and part of the Alberta Clipper pipeline. The Enbridge project, for Contract A Line 4 Expansion, will be 135-kilometer, 36-inch pipelines in three loops from Sherwood Park to Hardisty, Alberta. The Alberta Clipper project involves the construction of a 99-kilometer, 36-inch pipeline segment from Hardisty to the Alberta/Saskatchewan border near Kerrobert, Saskatchewan. Work is scheduled to be completed by March 2009. The Alberta Clipper project is a new 1,607-kilometer crude oil pipeline that will connect Enbridge's Hardisty, Alberta terminal to Superior, Wisconsin. [More here]

Virgin Islands Weighs Gas Pipeline to Puerto Rico (7/24/2008) The U.S. Virgin Islands is considering the construction of a natural gas pipeline from Puerto Rico to replace diesel used to generate power. Hugo Hodge Jr., chief of the U.S. Virgin Islands Water and Power Authority (WAPA) told an annual meeting of the utility's board that its customers would save a significant amount of money if they recalibrated oil-dependent generators to use natural gas. If a deal is reached in the coming months, an undersea pipeline would transfer natural gas to St. Thomas from the Puerto Rican island of Culebra. [More here]

Work Begins on Second Local Off-Shore LNG Site (7/17/2008) Action Energy has started staging for the construction of a $6 million liquefied natural gas terminal - named Neptune - ten miles off the coast of Gloucester, MA. When completed, it will be the second local intake terminal for the New England market according to Elliot Jacobson, director of Action Energy in Gloucester. The local fishing community had challenged Neptune and another LNG terminal further south on the Massachusetts coastline, but both were approved by then-governor Mitt Romney in December 2006. Action Energy made mitigation payments of $23.5 million, including $6.3 million to the Gloucester Fishing Community Preservation Fund, upon the start of Neptune’s construction. Excelerate Energy, which built the first terminal to the south, also paid $23.5 million in mitigation fees. When completed, natural gas from Neptune will be transported via a 13-mile pipeline to existing pipeline in Salem, MA and accommodate up to 400 million cubic feet of natural gas a day. [More here]

Keystone Pipeline to Expand to Serve the U.S. Gulf Coast (7/16/2008) TransCanada has announced plans to expand its Keystone crude oil pipeline system by 2012, providing an additional capacity of 500,000 barrels per day (bpd) to the U.S. Gulf from Western Canada. The plans are based on binding open season commitments of 300,000 bpd from several prospective shippers to the U.S. Gulf for an average duration of 18 years. "The Keystone expansion will be the first direct pipeline to connect a growing and reliable supply of Canadian crude oil with the largest refining market in North America," says Hal Kvisle, TransCanada president and CEO. The Keystone Pipeline - a joint venture of TransCanada and ConocoPhillips -- currently transports 590,000 barrels per day to the U.S. Gulf. The expansion will increase this amount to approximately 1.1 million bpd and includes around a 1,980-mile, 36-inch crude oil pipeline that starts at Hardisty, Alberta and terminates near Port Arthur, Texas. Further expansion up to 1.5 million bpd is possible with the addition of incremental pumping facilities. [More here]

July 2008 Update

noreply@blogger.com (Deb Harrsch) — Wed, 16 Jul 2008 12:00:00 +0000

In the news...

House Speaker Votes to Have TransCanada License Vote by July 16 (7/13/2008) Alaskan legislators returned to Juneau, Alaska on July 9 to complete work on a natural gas pipeline license proposal for TransCanada. House Speaker John Harris said he hopes a vote on the license will be taken by July 16. However three key issues must be addressed - first, how much gas is available for the pipeline company, second, if the license could trigger financial penalties against the state thus impeding the rival Denali pipeline being pursued by BP and ConocoPhillips and third, whether penalties would be enacted if the Legislature wants to help an industrial operator in southern Alaska needing more than 500 million cubic per day of gas (cfd) moved through a spur pipeline. The 500 million cfd through a spur pipeline is the threshold at which TransCandada can seek treble-damages under a provision in the TransCanada agreement. The proposed 48-inch pipeline by TransCanada is expected to move 4 to 4.5 billion cfd. [More here]

Enbridge Delays Plans for Major Pipeline to Ship Crude to the U.S. Gulf Coast (7/9/2008) Because of a worse outlook for oilsands production in northern Alberta, Enbridge is delaying for about two years its plans for completing construction of a major oil pipeline. The project is now expected to be complete in 2013 or 2014. Instead the company plans to ship Canadian crude to the U.S. Gulf coast. "The best market possible for Canadian heavy crude at the moment is the U.S. Gulf Coast (where much of that country´s refineries are located). What this project really does is provide a nifty interim solution to get volumes to the Gulf without waiting for a large diameter pipeline proposal that would take much more volume than is currently envisioned to be generated in the near term," said Enbridge vice-president Al Monaco in an interview. Enbridge's $350 million "Tailbreaker" project will use oil tankers to move 200,000 barrels of oil per day (bpd) to the U.S. Gulf. "When the volumes of Canadian heavy crude seeking access to the U.S. Gulf Coast exceed the capacity of Trailbreaker, we´ll be ready to meet that requirement with our Texas Access joint venture at a lower toll," Monaco said. The $2.6 billion Texas Access pipeline will connect Enbridge's mainline in Patoka, Illinois with hubs in the Houston, Texas area and transport up to 400,000 bpd. [More here]

TransCanada Pipeline Expansion May Cost C$7 Billion (7/9/2008) Construction of the next phase of TransCanada's Keystone oil pipeline from Hardisty, Alberta to refineries in Port Arthur and Houston, Texas is expected to cost C$7 billion. The 3,200 km expansion will transport 700,000 barrels of oil per day and has a target in-service date of late 2011. It adds to the C$5.2 billion Keystone project which will transport 590,000 bpd from Alberta to Cushing, Oklahoma starting late next year. The Keystone project is a 50-50 partnership with ConocoPhillips. [More here]

Alaska Governor Announces In-State Pipeline Plan (7/7/2008) Gov. Sarah Palin announced the Alaska Natural Gas Development Authority (ANGDA) and Enstar have proposed to build an in-state natural gas pipeline. The 450-mile pipeline will run from the Cook Inlet basin in southern Alaska going north to Fairbank, Anchorage and other Alaskan markets. The governor told a news conference the project would seek to "deliver our natural gas to our homes and to our businesses as quickly as possible to finally unlock the energy potential throughout Alaska." Gene Dubay senior vice president at Continental Energy, Enstar's parent company, said a partnership with Alaska and ANGDA would make the gas pipeline cheaper and easier to build. The Cook Inlet is thought to have a 50-year supply of gas. The pipeline construction, which is expected to be completed by 2013 will deliver 460 million cubic feet a day of natural gas. [More here]

Pipelines Continue to Be Safe However National Energy Board Concerned With Increase in Worker Injuries (7/3/2008) In a new report by Canada's National Energy Board (NEB) Canadian oil and gas pipelines are operating safely but there has been a spike in workplace injuries. According to the NEB's annual report "Focus on Safety and Environment: A Comparative Analysis of Pipeline Performance 2000-2006" between 1991 and 2002 an average of 2.5 pipelines regulated by the NEB ruptured each year. However, between 2002 and 2006 there were no ruptures. On the other hand the injury rate for pipeline workers more than doubled in 2006 versus the previous year, going from 0.7 injuries to 1.5 injuries for every 100 full time equivalent workers. It is the highest injury rate since 2001. In 2006 the 45,000 kilometers of NEB-regulated pipeline had 37 incidents related to safety, pipeline integrity and the environment. [More here]

Exxon-Alaska Relationship Tenses Up Over Pipeline (6/27/2008) After the U.S. Supreme Court's decision to reduce the amount of punitive damages Exxon Mobil is required to pay for the 1989 Exxon Valdez oil spill, many Alaskans are bitter about the ruling. But the relationship between the state of Alaska and the oil-producing giant may get worse. Gov. Sarah Palin has made building a natural gas pipeline from the Alaska's North Slope to the lower 48 states a priority for her administration. But first she needs Exxon Mobil to commit its portion of the gas in Prudhoe Bay to the project. So far the company has refused to commit to shipping gas through the proposed pipeline and, under a 1977 agreement among Prudhoe Bay producers, Exxon can stop its partners from committing their gas production to any pipeline. "In terms of the parties that have to be out on the field, so to speak, and playing for this to go forward, we have four out of the five: the state, BP, TransCanada and Conoco," said Joe Balash, special assistant to Ms. Palin. However, Balash said the relationship between the governor and Exxon wasn't close adding, "We don't think this is impossible to overcome, but it is going to require a certain amount of accommodation by Exxon, which is not their first choice in dealing with governments or commercial parties." Margaret Ross, an Exxon spokeswoman said, "We look forward to working with the state, the legislature and the people of Alaska to develop the state's resources in the future. We want to work with the state. Everyone believes it's important for a pipleline project to move forward." [More here]

Rocky Mountain Pipeline System LLC Announces Reversal of Wamsutter Pipeline (6/27/2008) After getting a long-term customer commitment Rocky Mountain Pipeline System LLC (RMPS), an indirect subsidiary of Plains All American Pipeline, L.P. plans to reverse its Wamsutter pipeline in the first quarter of 2009. Currently the pipeline transports Southwest Wyoming Sweet (crude oil) from RMPS's facilities in Wamsutter, Wyoming to Ft. Laramie, Wyoming. [More here]

ShawCor Completes Acquisition of Flexpipe Systems (6/27/2008) ShawCor Ltd. has completed its acquisition of all outstanding shares of Flexpipe Systems, Inc. for a total consideration of around $130 million. Flexpipe Systems manufactures spoolable, composite pipe used by oil and gas producers. ShawCor Ltd. is an energy service company that specializes in products and services for the pipeline and pipe services utilized by the oil and gas industries. [More here]

FERC OKs Review for BP-Conoco Alaska Natural Gas Pipeline (6/26/2008) The Federal Energy Regulatory Commission (FERC) has agreed to an early review of ConocoPhillips and BP's plan for a $30 billion natural gas pipeline from Alaska's North Slope to the lower 48 states. Due to the complexity of the project, an early review was advised by FERC. The "Denali Pipeline" plan proposes constructing a 48-inch or 52-inch diameter pipeline from Prudhoe Bay through western Canada. By "pre-filing," BP and Conoco can work with FERC in drafting economic, engineering and environmental studies before their final application is submitted for approval. A similar project was rejected by Gov. Sarah Palin in January when Conoco insisted on having tax deal talks before the prelimary work was started. The governor has express preference for a plan proposed by TransCanada over one owned by the North Slope oil producers, arguing an independent pipeline would allow greater access to new participants in the oil and gas fields. [More here]

Canadian Oil Pipeline Capacity Remains Tight (6/26/2008) Although there is some spare capacity in certain Canadian oil pipeline systems, additional capacity will soon be needed according to the Canadian Pipeline Transportation System Assessment from the National Energy Board. "Capacity constraints on oil pipelines in Canada were evident in 2007," said NEB Vice Chair, Sheila Leggett. "While there was some spare capacity, periods of apportionment meant that some pipelines were at times not able to fully meet shipper demand." Growth in oil-sands production and strong demand in the U.S. has resulted in high capacity utilization of Canadian oil pipelines. However, even during the peak winter season, there is adequate capacity on existing natural gas pipelines and, in some cases, excess capacity. The annual report examines more than 45,000 km of oil, gas and petroleum product pipelines to determine their adequacy and economic efficiency. [More here]

Magellan Midstream Assets Remain Fully Operational Despite Midwest Flooding (6/23/2008) Despite flooding in parts of the Midwest, Magellan Midstream Partners, L.P. has confirmed that its pipeline assets and petroleum products terminal remain fully operational. [More here]

Alberta Ceding Control of Gas Distribution Web to Federal Agency (6/20/2008) Ten years ago, TransCanada acquired Nova and its natural gas pipeline network based in Alberta. The Nova grid transports more than 10 billion cubic feet of gas per day. Last year it moved more than four trillion cubic feet of gas - more than two-thirds of western Canadian production or around 16 percent of the total North American gas output. Jurisdiction of the grid, currently under the control of the Alberta government, will be transferred to the Canadian National Energy Board. Alberta Energy spokesman Jason Chance said the reason for an independent transportation web is gone and its future lies in extensions beyond Alberta's boundaries, developing into a "hub" for continent-wide traffic in gas and byproducts. "Integrated" provincial, national and international service under federal supervision will make Nova the route to markets for new gas production from B.C., the Northwest Territories and Alaska, TransCanada predicted. [More here]

June 2008 Update

noreply@blogger.com (Deb Harrsch) — Tue, 17 Jun 2008 20:00:00 +0000

In the news...

Oil and Gas Industry Veteran Fackrell to Lead Producers' Alaska Gas Line Project (6/12/2008) ConocoPhillips and BP PLC selected oil and gas industry veteran Bud E. Fackrell to be the first president of Denali-The Alaska Gas Pipeline LLC. In April, the two companies announced the project to compete with TransCanada Corp. proposal currently under review by the Alaskan Legislature. "This is a real project for us," Fackrell said. "We are moving forward. We have made a $600 million commitment. The Alaska market is an important piece for us." He added Denali will continue to build its executive team in addition to the 50 field workers collecting data in Tok. By year's end, the goal is to have a 150 employees made up of workers from BP, ConocoPhillips and outside contractors. [More here]

Some Alaska Lawmakers Seek Quick Vote on Pipeline (6/11/2008) After completing a first round of hearings on a natural gas pipeline project, some lawmakers want to vote now on Gov. Sarah Palin's recommendation to give TransCanada a license for the pipeline and up to $500 million in subsidies. Although the Legislature has until August 1 to back or reject the governor's proposal, State Sen. Con Bunde said money could be wasted if lawmakers take the full 60 days granted by the Alaska Gasline Inducement Act. He added the Legislature's consultants hired to analyze the proposal concluded no harm could come from the license. However, Sen. Charlie Huggins said there is still too much to learn and a vote now implied the Legislature is only rubber-stamping Gov. Palin's proposal. House Minority Leader Beth Kerttula said each argument has merit, but added, "Let's hear all of it out." "Would I like to get a vote on this now and save all the time, energy and money? Absolutely," she said. "But am I willing to go through the slides, the presenters and all the information. That's probably the wisest." [More here]

U.S. EPA Rejects ConocoPhillips Refinery Expansion (6/10/2008) The U.S. EPA upheld a challenge to air permits granted by the Illinois EPA and required by ConocoPhillips to expand its largest U.S. refinery - Wood River Refinery - in Roxana, Illinois. The legal challenge by environmental groups and led by the Natural Resources Defense Council (NRDC) argued that harmful air pollution from the refinery was not being adequately controlled. NRDC senior attorney, Ann Alexander said "Excessive emissions from this expanded refinery would have harmed the health of everyone in the region." She added "We are not asking for hugely complicated or costly measures... Holding flare emissions down just requires sound engineering and responsible operating practices." The Wood River Refinery expansion is tied to the proposed 1,840-mile pipeline from Hadisty, Alberta. The pipeline, to be jointly developed with TransCanada, will be used to transport crude oil from Canadian tar sands. Without the proposed expansion, Wood River refines around 306,000 barrels of oil per day. [More here]

TransCanada Bewildered by Gazprom's Alaska Offer (6/10/2008) TransCanada is surprised about reports claiming OAO Gazprom, Russia's natural gas exporter and operator of the world's largest gas pipeline network, wants to talk about TransCanada's proposed $26 billion Alaska pipeline. "All I've seen are the press articles. TransCanada has not been approached by Gazprom," said Tony Palmer, TransCanada's vice-president of Alaska development. "TransCanada has offered parties that commit gas in the initial open season that we're prepared to offer equity to and, to this point, we don't know if producers will take us up on that offer. But those are the parties we would be approaching first to become potential partners in the project," he added "(Gazprom) is not a producer in Alaska today." According to Bloomberg, Gazprom is in talks with ConocoPhillips and BP PLC about partnering on a competing pipeline proposal. Bloomberg also reported Alexander Medvedev, Gazprom's deputy chief executive, says they are in talks with BP and ConocoPhillips and his company will "soon" begin talks with TransCanada. He went on to say "We don't just want to participate; we want to bring value," adding either project will cost "dozens of billions of dollars". Edward Jones energy analyst Lanny Pendill thinks Gazprom is using any means to get access to the United States gas market. He said a partnership would allow the company to "get its foot in the door". Last month Gazprom struck a deal with Enbridge Inc., Gas Metro and Gaz de France to supply a 500 million cubic feet per day of gas to the proposed $800 million Rabaska liquefied natural terminal east of Quebec City in exchange for an equity stake in the project. [More here]

Oil Will Peak at $150-200 - Barron's Interview (6/8/2008) Barron's magazine interviewed Goldman oil strategist Arjun Murti, who among other things, in 2004 predicted the current oil "super spike." He now sees oil peaking somewhere between $150 and $200 a barrel or, in other words, $5.75 a gallon. Murti says pipeline companies such as Oneok and El Paso stand to benefit from the United States' need to expand its pipeline infrastructure. Ultimately he does not believe $150-200 is sustainable and expects prices to fall back to $75 a barrel after people have changed their energy consumption behavior (e.g. driving less) - some time in the next 20 years. How long prices stay high is anyone's guess. [More here]

Pipeline Will Be Finished on Time, Brunswick Vows (6/8/2008) Emera-owned Brunswick Pipeline says its controversial natural gas pipeline will be completed on time. The 145-kilometer pipeline that runs through southwest New Brunswick (NB) to connect with the Maritimes and Northeast Pipeline at the U.S.-Canada border near St. Stephen, NB will deliver natural gas from the Canaport LNG facility near Saint John. The proposed route caused a public outcry from Saint John area residents because it is due to run through parts of Saint John, including Rockwood Park and across the St. John River. Company spokeswoman Susan Harris said crews are restoring the park and preparing for the pipeline's crossing of the St. John River. She said the company hopes to have gas flowing through the pipeline for its November in-service date. [More here]

Temple University Study of Pulsed Electromagnetic Fuel Treatment Yields Dramatic Results in Reducing Oil Viscosity (6/5/2008) Save the World Air, Inc. (STWA) has concluded tests conducted by Temple University's Department of Physics and sponsored by a major international engineering and oil refinery construction company. The results confirmed earlier tests showing substantial reductions in the viscosity of heavy crude oil, when treated with a patent-pending pulsed electromagnetic device. Crude oil densities are measured using American Petroleum Institute (API) gravity. The higher the number the less dense or the "lighter" the crude oil is. Oil API gravities of less than 21.5 are considered to be "heavy crude" while Brent crude's API of 38 is considered to be "light crude." Researchers using pulsed electromagnetic technology, without the heat factor, were able to reduce viscosities by 16% for API 11 and 19% for API 21. The results indicate heavy crude oil can be moved faster and more efficiently through pipelines from the wellhead as well as other applications in the transportation and refining process. Temple Physicist Dr. Rongjia Tao stated in his report, "We are very confident that STWA's licensed technology will be able to reduce the viscosity of crude oils, similar to API 21 by 30% with the electromagnetic treatment technology." The technology can be very beneficial to the oil industry, given the quantity of heavy crude available throughout the world, which up to now has been prohibitively expensive to extract. [More here]

Enterprise's Repair of Independence Pipeline May Cut Gas Prices (6/4/2008) A leak in the 134-mile 24-inch diameter Independence Trails pipeline has been fixed after 55 days of repairs. The $286 million natural gas pipeline owned by Enterprise Products Partners LP moves gas from the Independence Hub, located under 8,000 feet of water in the Gulf of Mexico. The Hub when fully operational produces 1 billion cubic feet a day or 2 percent of U.S. gas supplies and represents 10 percent of all deliveries from the Gulf. The leak originated in an O-ring gasket on a pipeline flex joint under 85 feet of water causing the shutdown of the pipeline on April 9. Natural gas futures have risen 26% to $12.221 per million Btu on the NY Mercantile Exchange since the shutdown. After Enterprise announced resumption of service, natural gas futures fell by as much as 1.6 percent to $12.06. Enterprise has more than 35,000 miles of pipelines. [More here]

TransCanada Says It May Seek to Build Peruvian Gas Pipeline (6/3/2008) As part of its strategy to satisfy increasing North American demand, TransCanada confirmed it may pursue building a natural gas pipeline in Peru. "It's purely an exploratory activity at this point,'' said company spokeswoman Shela Shapiro. "The idea has some inherent possibilities.'' The company may team up with Brazil's state controlled oil company, Petroleo Brasileiro SA, to become the third group to bid on the approximately $1.2 billion pipeline. TransCanada owns Canada's largest natural gas pipeline system with more than 36,669 miles of pipeline in the U.S., Canada and Mexico. "It's a logical fit for Peruvian gas to get into the North American market," said Shapiro, adding the Peruvian project suits the company's strategy of linking producing regions with North American consuming markets. Peru is South America's fifth largest natural gas producer and is expected to double gas output over the next four years. [More here]

Alaska Governor Proposes $500 Million in Subsidies for a Gas Pipeline (5/23/2008) Alaska Gov. Sarah Palin is suggesting $500 million in matching funds to subsidize the construction of a natural gas pipeline proposed by Canadian company TransCanada. The 1,715-mile pipeline would cost between $30 billion and $60 billion and transport gas from Alaska's North Slope to markets in the lower U.S. and Alaska. It could eventually supply up to 7 percent of the United State's current natural gas use. “A domestic supply of clean energy, you can’t go wrong with this,” Ms. Palin said. “We’re ready to tap it.” However, Bert Stedman, State Senator and vice chairman of a special Senate committee reviewing the proposal, said Gov. Palin's plan appears to take a great risk by granting so many incentives to TransCanada when the company has no commitment to use the pipeline from producers that own gas rights on the North Slope. A rival pipeline plan from two of the three major North Slope producers - BP and ConocoPhillips - was announced in April and the companies say they have committed to spending $600 million on early development of the pipeline. Gov. Palin countered her plan is superior because it included "enforceable commitments" from TransCanada and gas producers wanting to use the pipeline with an option to allow new companies to use it at reasonable rates. [More here]

Canada's Oil and Gas Front Man Calls It Quits (5/22/2008) Canada's top oil and gas sector advocate, Pierre Alvarez, president of the Canadian Association of Petroleum Producers (CAPP), resigned Wednesday May 21st but said he will stay with the powerful lobby group until a successor is found. The announcement precedes another announcement, made on May 22nd, that David MacInnis, president of the Canadian Energy Pipeline Association (CEPA) is to become VP of policy, government and public affairs at Chevron Canada Ltd. CEPA, which lobbies on behalf of Canada's pipeline industry, has promoted current VP, Brenda Kenny, to the position vacated by MacInnis. [More here]

Planned Pipeline to Carry North Dakota, Montana Natural Gas (5/20/2008) Williston Basin Interstate Pipeline Co., a unit of MDU Resources Group Inc. is planning on building a 100-mile 16-inch natural gas pipeline from Bakken shale formation in Montana and North Dakota to an existing pipeline that transports gas to Chicago, Illinois. The pipeline, estimated cost to be between $50 million and $75 million, will initially carry 100 million cubic feet of gas per day and ultimately up 200 million daily, according to company spokesman Tim Rasmussen. The company hopes to have the pipeline completed by mid-2010. [More here]

REX-West Fully Operational (5/20/2008) Rockies Express Pipeline LLC, a joint venture of Kinder Morgan Energy Partners, LP, Sempra Pipelines and Storage and ConocoPhillips, announced the final 210 miles of the Rockies Express West pipeline (REX-West) are now in service. Approximately 500 miles of the 713-mile 42-inch diameter pipeline that travels from the Cheyenne Hub in Weld County, Colorado to Audrain County, Missouri started service January 12. REX-West pipeline now has a natural gas capacity of 1.5 billion cubic feet per day (Bcf/d). Pending regulatory approval, the company will begin construction of REX-East, a 638-mile pipeline extending east from Missouri to Clarington, Ohio. The entire REX project is expected to operating by June 2009. [More here]

Canadian Superior Plans Gas Line for U.S. Northeast (5/20/2008) Canadian Superior Energy Inc. and Global LNG Inc. will collaborate through their joint venture - New Jersey-based Excalibur Energy Inc. - on a $550 million liquefied natural gas project. The Liberty Natural Gas Transmission Project includes a deepwater pipeline system 15 miles off the coast of Asbury Park, New Jersey and an import buoy used to process as much 2.4 billion cubic feet of gas from drilling sites off Trinidad and Tobago. Last year, the Caribbean country was the leading supplier of natural gas to the U.S., accounting for 3.4 percent of the U.S. gas supply, according to Energy Department data. Previous U.S. Northeastern projects have been delayed or stopped by citizens and state governments concerned about security and the environment. Excalibur CEO Roger Whelan said the liquefied natural gas will be delivered "without compromising safety or the clean waters off the Jersey shore.'' The company hopes to have the pipeline operational by late 2011. [More here]

FOCUS: Florida Readies for First US Ethanol Pipeline (5/19/2008) Kinder Morgan, the largest U.S. independent energy pipeline operator, is converting its 104-mile 16-inch gasoline pipeline running from Tampa to Orlando to transport both gasoline and ethanol later this year. "We're doing lab tests with different metals for the pipeline now and will have our first experimental ethanol run through the line in September," said Jim Lelio, Kinder's business development director. "If early runs are successful, commercial operations will start later this year. Gasoline will move through the line, followed by ethanol, and a small amount of intermingling will occur where the two meet, in what's called a transmix." Ethanol attracts water and when mixed with oxygen can cause pipes to crack; both problems must be solved by Kinder engineers before the pipeline can operate. Ethanol is derived domestically from Midwest corn and abroad from sugar cane in Brazil, the Caribbean and Central America. It enters Tampa by boat and train and will be stored in well sealed tanks before being piped to Orlando and sold by central Florida gas stations in a 10% ethanol blend E-10. [More here]

May 2008 Update

noreply@blogger.com (Deb Harrsch) — Thu, 15 May 2008 15:00:00 +0000

In the news...

Grain Gives Way to Fuel (5/14/2008) ......... ....................... All across the U.S. ethanol plants are consuming more and more of the nation's corn crop. This year, around a quarter of all corn farmed in the U.S. will go to feeding ethanol plants instead of livestock. "The price of grain is now directly tied to the price of oil," says Lester Brown, president of Earth Policy Institute, a Washington research group. "We used to have a grain economy and a fuel economy. But now they're beginning to fuse." Iowa, one of the two largest corn-exporting states in the U.S., now has 28 ethanol plants with dozens more under construction. Two pipeline companies, Magellan Midstream Partners and Buckeye Partners, are exploring if it is feasible to build a $3 billion pipeline to transport up to 3.65 billion gallons of ethanol from the Midwest to distribution points in Ohio and mid-Atlantic states. As a result of this new domestic demand stockpiles are dwindling and Iowa's exports of corn are expected to be less than half of current levels in a few years. [More here]

TransCanada, Enterprise Products and Quicksilver Gas Services Sign Agreement for Equity and Pipeline Capacity in Pathfinder Pipeline Project (5/12/2008) Affiliates of Enterprise Products Partners L.P. and Quicksilver Gas Services LP have signed a Memorandum of Understanding to acquire up to a total of 50 percent ownership of TransCanada's proposed Pathfinder Pipeline project. Enterprise would own up to 40 percent and Quicksilver the remaining 10 percent. Both companies committed to ship a total of 500 million cubic feet of gas per day for a 10-year period. TransCanada will own the remaining portion and be responsible for developing, constructing and operating the pipeline project. Phase one of the Pathfinder Project plans to install a 915-mile natural gas pipeline from Meeker, Colorado through Wamsutter, Wyoming to the Northern Border Pipeline Company system by 2010. Initial capacity is expected to be 1.2 billion cubic feet per day. A second phase will extend the pipeline to Emerson where gas can be shipped to Eastern markets or stored using the Great Lakes Gas Transmission system and TransCanada's Canadian Mainline system. Phase two could be in service as early as the fourth quarter of 2011. [More here]

Premier Counters Dirty Oil Threat (5/09/2008) ....... Alberta's premier, Ed Stelmach fended off an attempt by an environmental coalition's campaign to get the U.S. Congress to prohibit the use of "dirty oil" - from Alberta's oilsands - by American government agencies. The premier said if the U.S. does not want to utilize Alberta's oilsands - the second largest oil reserves in the world - the province will look to other countries. "We will not only depend on the American market. We will expand markets. If that means building a pipeline to the coast and selling oil to another country, we will," Stelmach told reporters Thursday. "We have options and we'll continue to pursue options." He added later it will be up to companies to decide if they should build a pipeline to the coast. "If there's further resource development and other parts of the world are crying for energy, the companies in the pipeline business, I'm sure, will determine that and make that decision," he said. The veiled threats came a day after the Natural Resources Defense Council and 26 other U.S. and Canadian environmental groups sent a letter to U.S. Congress men and women urging them to reconsider the use of oilsands-derived energy. Less than a week earlier, 500 ducks died in a toxic tailings pond near Fort McMurry - a loss condemned by both the prime minister and environmental groups - tarnishing Alberta's environmental image around the world. [More here]

With Billions of Dollars at Stake, TransCanada Pitches Pipeline (5/8/2008) Calgary, Alberta-based pipeline operator TransCanada Inc. is waiting to see if Gov. Sarah Palin's administration will forward its pipeline proposal to the Alaskan Legislature for approval during the week of May 19. If approved, the company - the only one to meet the state's Alaska Gasline Inducement Act (AGIA) requirements - potentially qualifies for $500 million in state subsidies. In the meantime, competing oil companies ConocoPhillips and BP have put forth their own proposal called the "Denali Alaska Gas Pipeline." The companies argue they are better suited to build the pipeline because they hold rights to much of the North Slope's gas. Tony Palmer, vice president of Alaska Development for TransCanada, said that outside of Alaska, "It's not the norm for producers elsewhere to own pipelines." ConocoPhillips and BP have suggested, along with ExxonMobil Corp., they wouldn't make their gas available to competing pipelines. Palmer said TransCanada spent years developing rights of way for the gas pipeline through Canada - the same route proposed by BP-ConocoPhillips - and the company will defend those rights. [More here]

Enbridge Has $15 Billion in New Projects Under Consideration CEO Says (5/8/2008) Enbridge Inc.'s CEO Patrick Daniel told shareholders at their annual meeting that the company has $15 billion of new projects under consideration to expand their network of pipelines. One proposed project is the $2.6 billion Texas Access pipeline it plans to build with ExxonMobil Corp. to bring Alberta oil down to the refining hub of Port Arthur, Texas. The pipeline would connect to Enbridge's mainline in Patoka, Illinois and have a capacity of 400,000 barrels by 2012. Enbridge also plans to file an application for construction of its Gateway pipeline to Kitimat, B.C. by 2009. The oil pipeline would open up new markets to California and East Asia. The company is currently in discussions with several undisclosed Canadian oil producers about the pipeline. [More here]

Federal Government Grants Rehearing of Pipeline Tariffs (5/7/2008) The Federal Energy Regulatory Commission (FERC) agreed to give more time to reconsider tariffs it granted to Western Refining Pipeline Co. to ship crude oil in the company's 414-mile pipeline. The Navajo Nation and Resolute Natural Resource Co. objected to the tariff's - which range from $6 to $7.50 a barrel and went into effect on March 10 - on grounds that they were discriminatory and harm producers in the Four Corners region. "In order to afford additional time for reconsideration of the matters raised or to be raised, rehearing of the commission's order is hereby granted for the limited purpose of further consideration," Nathaniel Davis Sr., deputy secretary of the commission, wrote in the order. Although the Navajo Nation currently does not ship on Western's pipeline, it plans to do so in the future. The tribe claims the price Western offers for crude oil produced by Navajo Nation Oil and Gas Co. will reduce revenues by $4.2 million and lose about $6 million in royalty and tax revenues each year. Western Refining spokesman, Gary Hanson declined comment on the claim, only saying, "I'll let the previous ruling stand for itself". [More here]

Crude Costs Pump Oil Pipeline Capacity (5/7/2008) Canada's National Energy Board (NEB) said in its annual report that surging crude oil prices are responsible for a big shift to oil pipelines. Last year, NEB considered applications for almost one million barrels per day (bpd) of new oil pipeline capacity versus just a total of 40,000 bpd in 2006. "Without a doubt, the National Energy Board shifted into high gear throughout 2007," said NEB chairman and CEO Gaetan Caron. Applications included TransCanada Corp.'s Keystone pipeline that will transport 590,000 bpd when completed in 2009 and grow to 1.3 million bpd by 2013-14. NEB also reviewed Enbridge Inc.'s Alberta Clipper that will initially move 450,000 bpd before expanding to 800,000 bpd. Only one major gas project - the proposed MacKenzie Valley natural gas pipeline - was brought before the board last year. The project is still awaiting NEB's approval, but a final decision is expected in June. [More here]

Pipeline Giant Eyes Expanded Project (4/26/2008) .... Although TransCanada is about to start construction of its $5.2 billion Keystone oil pipeline, it is already planning a massive expansion. Once the first phase is completed in 2009, the new expansion will add a second 36-inch pipeline that takes a different route by going from Alberta's pipeline hub at Empress to Port Arthur on the Gulf Coast of Texas. The second pipeline would add another 750,000 barrels per day (bpd) for a total combined capacity of approximately 1.3 billion bpd. ConocoPhillips, which has committed to be a shipper on Keystone's first phase, has a 50 percent stake in the new project. Texan refineries can better handle the heavier oil blends from Alberta because of their experience with similar heavy oil traditionally used from Venezuela. TransCanada's CEO Hal Kvisle said, "Both projects (Keystone one and two) are in the broad public interest of Alberta and Canada," because higher volumes of Alberta oil will spur demand in North America's largest refining market. The resulting demand will narrow the price differential between Alberta wellhead prices and Texas refineries. [More here]

Oil Giants Push for Pipeline in Congress (4/21/2008) ...... Two of Alaska's North Slope biggest oil producers - BP and ConocoPhillips - were in Washington, D.C. pushing their plan to build a $30 billion pipeline to carry natural gas to the continental U.S. BP Alaska president Doug Suttles and Jim Bowles, chief executive of ConocoPhillips' Alaska operations, met with the Federal Energy Regulatory Commission and members of Alaska's congressional delegation. Sen. Lisa Murkowski, R-Alaska, said she left her meeting with Suttles and Bowles “feeling good about the future of the state.” Sen. Ted Stevens, R-Alaska, said “We’re looking now at certainty that we’re going into a period of real development, I think that changes the dynamic of the Alaska economy.” The project, named Denali Pipeline by the ConocoPhillips-BP partners, would deliver 4 billion cubic feet of gas per day or around 8 percent of the nation's current demand. The companies say they have the experience and capital required for the pipeline. Their plan calls for a 48-inch diameter pipeline from Prudhoe Bay that would follow the existing trans-Alaska oil pipeline corridor to Fairbanks where it would split off alongside the Alaska Highway before ending in Alberta. Existing pipelines will be used to ship the gas onto the Lower 48 states. Bowles and Suttles said each of their companies approved $300 million to spend over the next two summers to get the project to open season. State officials who are considering TransCanada's proposal - the only one approved by Gov. Sarah Palin's administration - welcomed the announcement, but said more information is needed to properly evaluate it. Gas could flow down the pipeline beginning 2018 if project stays on schedule, according to Bowles. [More here]

TransCanada, Enbridge Ready to Work with Oil Majors (4/20/2008) After North Slope producers BP and ConocoPhillips announced plans to build a $30 billion gas pipeline and preparations for a 2010 open season, TransCanada Corp. and Enbridge said they are ready to work with them. Tony Palmer, TransCanada's vice president for Alaska development, said, “We believe we are the best independent pipeline to pursue the project because our proposal to the state meets every one of its goals,” and allows for equity participation by producers. However, Enbridge Vice President Ron Brintnell said his company has years of experience building pipelines in northern climes adding, “We have $12 billion in current projects under way, which gives us current knowledge with construction and steel costs. No one can touch Enbridge's experience with current construction.” State legislators were encouraged by the announcement, but Alaskan House Speaker John Harris expressed concerns about how to maintain a sense of competition if only one producer pipeline is moving forward. [More here]

April 2008 Update

noreply@blogger.com (Deb Harrsch) — Thu, 17 Apr 2008 22:00:00 +0000

In the news...

Pipeline Setback Gives Oil A Lift (4/14/2008) ... . . Disruption in a major U.S. oil pipeline was a factor in causing the May-date West Texas Intermediate crude contract price to briefly trade above $111. Royal Dutch Shell's Capline pipeline shut down on April 11 after a leak was discovered by a Tennessee worker. The pipeline transports 1.1 million barrels of oil per day from Louisiana to Illinois, feeding BP's Whiting, Indiana refinery and Marathon Oil's refinery in Catlettsburg, Kentucky. A Shell representative was not sure when the pipeline will be back online. [More here]

Denali Pipeline To Surpass Alaskan Pipe In Cost, Regs (4/11/2008) In addition to higher steel costs, the proposed Denali natural gas pipeline faces strict environmental laws and a mountain of regulatory challenges seldom seen in the 150-year history of the global oil industry. The pipeline project, which takes its name from North America’s tallest peak – Denali, also known as Mt. McKinley – is currently awaiting a critical $600 million open season process and will have to obtain approximately 1,000 permit approvals from the U.S., Alaska and Canada. The pipeline will follow the existing Trans Alaska pipeline thus avoiding the environmentally sensitive Arctic National Wildlife Refuge. Cost for metal to construct the pipeline could reach $6 billion alone and it could take 10 years to complete vs. the nine years needed for the Trans Alaska pipeline. The total cost is expected to be $30 billion, which, ironically is the same as the inflation-adjusted cost of the Trans-Alaska pipeline. When completed, the Denali pipeline could transport 8% of the current U.S. natural gas supply. [More here]

Gas Plant in L.I. Sound Is Rejected (4/11/2008) . ........ . . New York Gov. David A. Patterson blocked a proposal to build the nation's first floating liquefied natural gas plant in the Long Island Sound. “One of my goals as governor is to protect Long Island Sound,” Mr. Paterson said at Sunken Meadow State Park, on Long Island. “Shame on us if we can’t develop a responsible energy policy without sacrificing one of our greatest natural and economic resources.” Gov. Patterson added the region can find other more responsible ways to obtain energy. The Broadwater Energy plan called for construction of a $700 million natural gas terminal as well as a 22-mile underwater pipeline that connects to the existing Iroquois pipeline that serves New York and Connecticut. John Hritcko, senior vice president and regional project director for Broadwater, an energy consortium consisting of Shell Oil and TransCanada Pipelines, said the rejection represents a “missed opportunity” to lower energy prices for consumers and businesses. Broadwater opponents argued the terminal would be vulnerable to a terrorist attack and jeopardize traditional industries like fishing and oyster harvesting. [More here]

Exxon Mobil May Join BP, ConocoPhillips Pipeline (4/8/2008) Spokeswoman Margaret Ross confirmed Exxon Mobil was invited to participate in the new ConocoPhillips and BP PLC Denali natural gas pipeline project in Alaska. "ExxonMobil was only made aware of the ConocoPhillips-BP plan a few days prior to the announcement," she said. "We need to better understand their approach to ensure that it will lead to a commercially viable development on a cost and schedule basis that will deliver maximum benefits to the State of Alaska, the producers and consumers in the United States and Canada." [More here]

JayHawk Energy Inc. Announces The Acquisition Of A 16-Mile Pipeline (4/1/2008) JayHawk Energy Inc. has purchased assets from Galaxy Energy Inc., a private company in Crawford and Bourbon counties of Kansas. The assets include a sixteen (16) mile gas pipeline and gas production within 6,500 acres of land bordering the pipeline for $2 million. [More here]

Company Seeks Gas Pipeline (3/29/2008) . ....................... ConocoPhillips plans to develop a pipeline to transport natural gas from Alaska's North Slope to the lower 48 states and Canada. The company estimates the entire project will cost between $25 billion and $42 billion and move about 4 billion cubic feet of natural gas per day. The company also said it is "prepared to make significant investments, without state matching funds, to advance this project." In a prepared statement ConocoPhillips Chairman and CEO Jim Mulva said the company hopes to work directly with the state of Alaska to expedite the project, as well as partner with other companies including Exxon Mobil Corp., BP PLC and possibly a pipeline company. BP spokesman Steve Rinehart could not speculate on the offer and Exxon Mobil had no comment. ConocoPhillips is in the process of gathering data to support its pipeline permit application. A proposed deal between North Slope producers BP, Exxon Mobil and ConocoPhillips and former Alaskan Gov. Frank Murkowski fell through last year. [More here]

More Than A Pipe Dream (3/28/2008) ............................ .... It seems like America is getting high on natural gas. With around 25 pipeline projects and 11 storage projects, natural gas pipeline builders are in the midst of a building boom. One of the longest pipelines ever built - the 1,678-mile Rockies Express - is near completion and the industry has not been this busy since the 1950s, according to consulting group Bentek Energy. However, many uncertainties lie ahead. Supply depends on drillers' ability to ramp up production and some pipeline builders face a labor shortage. Competition is fierce since pipeline builders need to get right-of-way before anybody else does while keeping costs under control for their customers. Although the need to construct pipelines is driven largely by the demand from energy consumers, it is also driven by the discovery of new supplies. Shallow natural gas fields in the Gulf of Mexico are almost exhausted but new drilling technology now enables access to the deepest fields. As a result, new construction is now based on speculation about future production instead of on current production. Government regulation of everything from utilities to right-of-way and greenhouses gases affects pipeline builders. The ongoing construction boom may lead to overcapacity, depending on the outcome of many of these factors. It will take years before that unknown will be resolved. [More here]

Pipeline Would Take Rockies Gas To Markets In U.S. And Canada (3/26/2008) Two pipeline companies - Alliance Pipeline Inc. and Questar Overthrust Pipeline Company - plan to build a 42-inch, 800-mile Rockies Alliance Pipeline from Wyoming to Canada, U.S Midwest and Northeast. The estimated $3.5 billion project will transport natural gas from Wamsutter, Wyoming, traversing Wyoming, Montana and North Dakota, on its way to the Emerson trading hub located on the Minnesota-Canada border. Brian Jeffries, executive director of the Wyoming Pipeline Authority, said the Rockies Alliance project can provide new markets for the state's natural gas and is one of five pending pipeline proposals. A sixth, the Rockies Express, is already under construction. Questar and Alliance will start taking bids from customers interested in using the pipeline on May 1st. Subject to financing and regulatory approval, the companies plan to have the whole pipeline operating by fall of 2011. [More here]

Alaska Senator Stresses Gas Line (3/19/2008) ................ U.S. Alaskan Senator Lisa Murkowski told members of the Alaskan Legislature that time is running short for Alaska to get a natural gas pipeline project started on its North Slope. During her annual speech she said, "We are slipping and cannot afford to slip any further. Our competitors are moving ahead. Our oil production is dropping. Steel and construction prices just climb higher every year." Although Sen. Murkowski didn't criticize Gov. Sarah Palin's Alaska Gasline Inducement Act (AGIA) she placed the onus to get things moving equally on pipeline companies, the federal government and North Slope lease holders - ConocoPhillips, Exxon Mobil Corp. and BP PLC. TransCanada was the only applicant to comply with regulations established in AGIA. However, ConocoPhillips is promoting a competing plan outside the state's bid requirements but it is seeking what it calls fiscal certainty - long-term tax and royalty terms for the North Slope lease holders before a pipeline license is awarded. Sen. Murkowski commented "I recognize the value of the AGIA process. But, clearly Conoco is on its own track. Is it wrong to have a duel track? In my opinion, anything that will get us a gas line sooner is worthwhile." [More here]

New Pipelines Will Even Out Gas Prices (3/15/2008) . ....... . Last fall in the Rocky Mountain region of the U.S., due to excess production and limited pipeline capacity, spot prices for natural gas producers dropped to a low of only 5 cents per 1,000 cubic feet. For consumers in the region the surplus has been a boon. However, after years of low prices, things are about to change. A new pipeline - 1,678-mile Rockies Express from Meeker, Colorado to Clarington, Ohio - is almost finished and is now partly operational. The pipeline, with a capacity of 1.6 billion cubic feet per day, will allow gas suppliers to sell to other markets including California, Phoenix, Arizona and Midwest area. In addition to gas suppliers making more money, analysts predict the new pipeline will even out national supplies reducing price spikes elsewhere, especially in the East. This change could be at the expense of those consumers located the Rocky Mountain states. Producers counter as long as production continues to ramp up, local prices should stay under control. Although Texas is currently the country's biggest producer of gas, the Rockies region most likely contains more than 200 trillion cubic feet of natural gas reserves - enough to supply the U.S. for 10 years. [More here]

TransCanada Ready To Start Building U.S. Oil Line (3/14/2008) TransCanada Corp. plans to start construction on its 2,148-mile, $5.2 billion Keystone oil pipeline the second quarter of this year. A key factor in the decision to start building was a presidential permit issued by the U.S. State Department for the construction of a 590,000 barrel per day pipeline at the Canada-United States border. "The U.S. Department of State has determined that this is in the national interest, so after a culmination of years of hard work we're certainly pleased to have the permit," said TransCanada spokeswoman Shela Shapiro. The pipeline, co-owned by ConocoPhillips, will extend from Alberta to Oklahoma and southern Illinois. Part of the Canadian side of the pipeline will use an existing natural gas pipeline converted for transporting oil. The pipeline is targeted to be in service in late 2009. [More here]

Canadian Pleads Guilty In Oil Pipeline Bomb Plot (3/13/2008) Canadian Alfred Reumayr of British Columbia pleaded guilty to charges of plotting to blow up the Trans-Alaskan oil pipeline on January 1st, 2000, at the U.S. District Court in Santa Fe, New Mexico. After being arrested in August 1999 by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosive and the Royal Canadian Mounted Police, Mr. Reumayr was accused of soliciting the help of a U.S. citizen to bomb the Trans-Alaska Pipeline System. Prosecutors said Mr. Reumayr acquired explosives, which he planned to locate at three points along the pipeline in order to disrupt energy supplies. They said Mr. Reumayr also hoped to profit from the attacks by purchasing energy securities at low prices and then selling them after the attack during the market turmoil resulting from the attacks. [More here]

The Natural Gas Industry Lags When it Comes to Integrating Data

noreply@blogger.com (Unknown) — Tue, 15 Apr 2008 20:32:00 +0000

Even with all the technological advances over the last ten years, the natural gas industry still struggles when it comes to integrating operational and commercial data. The industry is state-of-the-art in tracking SCADA and real time operational data. Much can also be said about the commercial side of the business with its scheduling, nomination, and allocation processes. However, when it comes to merging real-time operational data with commercial accounting data in order to get a real-time financial look at a pipeline, the industry lags.

Departments within an organization are often very distinct and operate with different priorities. Operations focuses on running the pipeline and would like to have commercial/accounting data to make better decisions. Commercial and accounting focus on revenue and need to see how they are doing right now (before official measurement close). While they both need each other’s data, they are often hesitant to share it based on the fear that it may be misinterpreted. It’s not uncommon to have two different numbers being reported because the data was viewed differently. That just causes frustrating reconciliations – and often finger pointing – all trying to get to the “real” number.

Recent software advances make this integrated data more readily available – without the grinding behind-the-scenes effort historically needed to consolidate the information. However, companies need to commit to a process, tear down the silos within the organization, and do some up-front work without grousing about “how this didn’t work in the past.”

The result will be a world class organization that can have its data available to all concerned parties – without worrying about whether the number is right, or whose data is better. It will all be consistent.

Robert W. Young
Product Manager – Commercial Applications

March 2008 Update

noreply@blogger.com (Deb Harrsch) — Fri, 14 Mar 2008 21:30:00 +0000

In the news...

Williams and TransCanada Propose New Natural Gas Pipeline for Western U.S. (3/13/2008) Williams and TransCanada may develop a new natural gas transmission pipeline - Sunstone Pipeline - to transport gas from the Rockies to markets in the western US. The proposed 618-mile, 42-inch pipeline will have a capacity of up to 1.2 billion cubic feet per day. If built, the Sunstone Pipeline will parallel the existing Williams Northwest Pipeline system. That pipeline runs from its Opal hub in Wyoming to Stanfield, Oregon and interconnects with TransCanada's Gas Transmission Northwest (GTN). The Sunstone project has the option to serve both Northwest and GTN markets. Additional benefits of the Sunstone Pipeline include: construction of fewer miles of pipeline along an existing utility corridor, favorable rates due to efficiencies from existing operations and infrastructure, and increased access to markets in Nevada, California and Pacific Northwest. The project, if approved, is scheduled to begin service in 2011. [More here]

Gas Explosion Injures Six, One Missing (3/12/2008) . ....... A March 12 natural gas explosion 15 miles off the coast of Marsh Island, Louisiana injured six crew members of a pipeline maintenance vessel and left another missing. The maintenance vessel Jillian Morrison was clearing gas from a closed section of pipeline when the explosion occurred. The pipeline owner, ANR Pipeline Co. (a subsidiary of TransCanada), said its pipeline system and natural gas supplies to customers were not affected by the blast. However, El Paso Corp's Tennessee gas pipeline was affected leading the company to declare force majeure because it was unable to meet contractual supply obligations. Three crew members have been released from the hospital while three more were listed in serious condition at the hospital in Lafayette, Louisiana. The Coast Guard is continuing its search for the missing crew member. A cause for the explosion has not been determined. [More here]

Exxon Flexes, Critiques Gas Line (3/10/2008). ............ Exxon Mobil Corp. submitted a 14-page document criticizing a TransCanada bid to build a North Slope natural gas pipeline. TransCanada is the only bidder approved by Alaska Gov. Sarah Palin for the project. Exxon said the 1,715-mile, $26 billion pipeline proposal is seeking too much profit and seeks to send the Alaskan gas only into TransCanada's Alberta pipeline network. The higher shipping rates TransCanada expects to charge could discourage drillers from locating and developing new gas supplies. However, the proposal also offers to share ownership of the pipeline and Exxon expects to be a co-owner with a stake equal to its share of gas flowing through the pipeline. [More here]

Alaska Mulls Pipeline Options If Big Oil Balks (3/6/2008) Alaska and the U.S. Federal government are considering other options in the event Exxon Mobil, ConocoPhillips and BP Plc refuse to back Gov. Sarah Palin's approval of the TransCanada Corp. pipeline proposal. The natural gas and oil producers are wary of working with Canada's largest pipeline firm. Gov. Palin has threatened to revoke leases for oil fields including Prudhoe Bay if the companies do not participate in her process. Alaska is considering the potential for an alternative liquefied natural gas project along with the TransCanada proposal. The U.S. Department of Energy is evaluating other pipeline construction proposals as well. Congress is also eager to tap into the 35 trillion cubic feet of North Slope gas reserves to meet U.S. demand, according to Drue Pearce, federal co-ordinator for Alaska Natural Gas Transportation Projects. "(Lawmakers have) said: 'Alaska, you need to move because, if we have to, eventually, Congress will step in and make sure this pipeline gets built'," Pearce said. [More here]

Widening Investigation May Present A Hurdle For Gas Pipeline Project (3/6/2008) Federal prosecutors expanded their Alaska corruption investigation into the executive branch of government after Jim Clark, chief of staff for former Gov. Frank Murkowski, pleaded guilty to a felony conspiracy charge in connection with illegal campaign contributions. Around 10 percent of the 2006 Alaskan Legislature have been implicated in corrupt activity. "This bleed over into another branch of government ... is very, very unfortunate in terms of Alaska's reputation," Gov. Sarah Palin said. She also said past negotiations with oil companies to get a natural gas pipeline built took place behind closed doors. It now appears VECO Corp. was making illegal campaign contributions to the state's lead negotiator to the governor. None of the North Slope oil producers applied for the pipeline license, nor did a respected pipeline company, Mid-American Energy, citing the fallout from the corruption investigation. The governor said her administration is working to set a new standard for ethical and open government. [More here]

Fatal US-Canada Pipeline Fire Causes Over $3 Spike In Oil Prices (3/3/2008) Fire broke out at an Enbridge Energy pipeline in Northern Minnesota. Two workers repairing the pipeline were killed by the fire. The pipeline carries crude oil from Canada to the U.S. Midwest. In total, five pipelines will have to be shutdown until repairs can be made. Enbridge spokeswoman - Denise Hamsher - said the company stored oil in stations along the line and at refineries thus avoiding disruptions in supply to the Midwest for several day. However, oil prices rose more than $3 on uncertainty of how the pipelines closure would affect supplies. [More here]

Enbridge Inc. Gets Approval For Southern Lights Diluents Pipeline (2/27/2008) On February 20 Enbridge Inc. announced it received approval from the National Energy Board (NEB) for its Southern Lights pipeline that will transport diluents, gasoline-like liquids, from U.S. refineries to Edmonton, Alberta. The Calgary-based company plans to build a new section of 20-inch pipeline from Chicago, Illinois to Clearbrook, Minnesota and reverse the flow of its Line 13, that currently transports light synthetic crude oil from Edmonton to Clearbrook. In total, the project involves laying 1,085 kilometers of 16-inch pipe and will run through Illinois, Wisconsin, Minnesota, North Dakota, Manitoba, Saskatchewan and Alberta. It will have a capacity of 180,000 barrels-per-day and is expected to cost $2.2 billion. [More here]

Enbridge Receives NEB Approval On Alberta Clipper Expansion Project (2/22/2008) The National Energy Board (NEB) approved Enbridge's application for the Alberta Clipper Expansion Project. The project involves the construction of a new 1,000-mile, 36-inch crude oil pipeline from Hardisty, Alberta to Superior, Wisconsin. Once completed the pipeline's initial capacity will be 450,000 barrels-per-day (bpd) which can be increased up to 800,000 bpd. It is scheduled to be in service by mid-2010 pending U.S. regulatory approvals.... [More here]

TransCanada Plots Next Big Oil Line To Gulf Coast (2/21/2008) TransCanada is plotting an even bigger pipeline than its Keystone project to transport Canadian crude to the U.S. Gulf coast. The company is considering a direct route to the huge refining hub in the Gulf. The other option is to send Canadian oil sands crude to more distant refineries via its under-used natural gas pipelines for part of the route similar to its Keystone project. "But if the demand for transportation materializes more quickly, we would look at building a direct line," TransCanada CEO Hal Kvisle told investors at a conference in Whistler, British Columbia. "Either way, the discussions are well advanced and this is one of the future projects that we will be bringing forward here in the months ahead," he said in his Webcast speech. The 2,148-mile, $5.2 billion Keystone pipeline starts construction in the next few months. It is scheduled to start service in 2009 or 2010 and can transport 590,000 barrels of oil per day. The Gulf coast currently demands seven million barrels of crude a day. Canadian crude production could increase by one to two million barrels per day in the next decade, according to Kvisle. [More here]

February 2008 Update

noreply@blogger.com (Deb Harrsch) — Sat, 16 Feb 2008 02:00:00 +0000

In the news...

Port Authority Presses All-Alaska Pipeline Route (2/13/2008) Officials from the Alaska Gasline Port Authority asked Alaskan legislatures to reconsider an option to build a natural gas pipeline through Alaska traveling from the North Slope to Valdez. The port authority's application to build the all-Alaska pipeline was considered incomplete and thus rejected by Gov. Sarah Palin's administration in January. Project manager Bill Walker said the port authority's plan was initially rejected because it was not able to get project cost and other data from industry partners pressured to withdraw from the bid. He urged lawmakers to do a "full and robust" independent analysis of the all-Alaska project before deciding to accept the proposal by pipeline company TransCanada - the only proposal determined to be complete under the Alaska Gasline Inducement Act process. Walker told Senate Resources Committee Members the 806-mile pipeline from Prudhoe Bay to Valdez could be built faster, face fewer hurdles and benefit the state because gas liquefied for transport on tankers could be sold to multiple markets. [More here]

Paline and Gas Line Team Meet with ConocoPhillips (2/12/2008) Alaska Gov. Sarah Palin met with ConocoPhillips' executives to discuss a proposed pipeline for transporting natural gas from the North Slope. Gov. Palin rejected a proposal from ConocoPhillips in January that was outside the Alaska Gasline Inducement Act guidelines. She said the almost four-hour meeting was to review concerns the company had with AGIA and not to negotiate any tax rates and length of terms the company sought with their gas pipeline proposal. "It's to fulfill our commitment to not dismiss anybody's ideas and proposals on how to monetize Alaska's gas resources," Palin said. Although TransCanada's proposal was the only one to comply with AGIA, ConocoPhillips has launched a publicity campaign to keep its position at the forefront. [More here]

Canada, Brazil Lead Oil Output Growth in Americas (2/8/2008) Investment in Canada's oil sands and increasing Brazilian crude production should more than offset declines elsewhere in the Americas -- including Mexico and Venezuela, a Reuters survey showed. The gains from Alberta's vast tar-like oil deposits should increase oil production 7 percent to around 3 million barrels a day, while discoveries off Brazil's coast could help increase production by 13 percent to 2.32 million barrels per day. "What we have been seeing is relatively flat or falling supplies from Mexico and Venezuela," said Greg Stringham, vice-president of the Canadian Association of Petroleum Producers. Output from OPEC member Venezuela could dip slightly to 2.43 million barrels and, in Mexico, production may fall by 180,000 barrels a day to 3.32 million, the survey said. Those declines are large factors behind a push by pipeline companies to build new capacity from Canada to Texas - the largest U.S. refining region. Already, producers ship supplies to Oklahoma, well beyond the traditional U.S. Midwest market for Canadian crude. [More here]

TransCanada Makes Pitch to Legislature (2/7/2008) TransCanada's VP Tony Palmer spoke to the Alaskan Senate Resources Committee and assured them TransCanada could build a gas pipeline to bring the state's North Slope gas reserves to market despite doubts from some legislators and competing companies (including ConocoPhillips, Exxon Mobile Corp. and BP who hold rights to the gas). TransCanada, an independent pipeline company, based in Alberta, was named the only qualifying applicant to meet the requirements of the Alaska Gasline Inducement Act. Competing companies claimed only those who hold the gas can successfully build the pipeline. Palmer countered those companies that produce oil and gas don't handle transporting their product themselves but instead rely on companies such his to move oil and gas to market. TransCanada proposes building a 48-inch pipeline through Alaska to Alberta that is capable of transporting 4.5 billion cubic feet of gas per day. Concerns the gas would go to Alberta to be consumed and not to U.S. Midwestern markets are unfounded according to Palmer. Exxon Mobil claimed to be one of few companies that could build a project that size and keep costs down. Palmer said his company can too noting that in their proposal the company's return is reduced in the event of cost overruns. "TransCanada will be highly motivated to be sure we do the best job we can possibly to do to control costs," he said. Although Gov. Sarah Palin's administration officials have approved TransCanada's proposal, several lawmakers question this decision because TransCanada's application includes qualifications such as requesting a review of tax issues, which may not meet AGIA's requirements. [More here]

Natural Gas Demand Continues to Drive Worldwide Pipeline Construction Activity (2/5/2008) According to Pipeline and Gas Journal's latest worldwide survey figures, 144,096 miles of oil and gas pipelines are either under construction or planned. North American companies alone are responsible for 46,072 miles of these pipelines. In the U.S. efforts are under way to expand natural gas pipeline capacity to meet unprecedented demand. Of particular note is the Rockies Express (REX) $4.4 billion, 1,678-mile pipeline designed to link natural gas producers in the Rocky Mountain region with eastern U.S. customers. National Fuel Gas Co. proposes building a $700 million West-to-East Pipeline stretching 324 miles from Corning, NY to southeastern Ohio and linking up with REX. The National Pipeline will also link up with the Millennium Pipeline 187-mile pipeline connecting Corning to the New York City metropolitan market. However, these plans face competition from operators of the Rockies Express Pipeline. Williams proposes a 250-mile Rockies Connector Pipeline form Clarington to York County, PA. Spectra Energy's planned Bronco Pipeline will connect Rocky Mountain supplies with under-served western markets via a more than 650-mile pipeline. Willbros U.S. Construction will construct 257 miles of the 560-mile Midcontinent Express Pipelinenning from north-central Texas crossing Oklahoma and Arkansas before ending in Coahoma County, MS. Finally, Boardwalk Pipeline Partners, Energy Transfer Partners and ONEOK Partners have formed a joint venture to construct a $1.1 billion Gulf Crossing 355-mile natural gas pipeline that will originate in southern Oklahoma and extend through northern Texas and terminate in northern Louisiana. [More here]

LNG Suit Getting Noticed (1/30/2008) Energy company AES Corp. and the Baltimore County government are in a federal appeals court to decide whether a liquefied natural gas (LNG) terminal can be built at the former Bethlehem Steel shipyard on Sparrows Point in Maryland. To defeat the controversial LNG project, Baltimore County is using a federally and state mandated program designed to protect coastal areas. So far the county's modified coastal zone management plan has withstood one court challenge from AES Corp. The company wants to build a LNG terminal that will unload imported super-chilled LNG from overseas tankers and return it to its gaseous state. The gas will then be pumped through a proposed 87-mile pipeline to southern Pennsylvania for distribution. AES argues the county overstepped its authority by attempting to interfere with international and interstate commerce. Experts familiar with case say energy companies and local governments nationwide are interested in how successful Baltimore County is in defeating the LNG project. The case could have broader implications for other types of industries as well. [More here]

Alaska North Slope May Hold 36 Billion Barrels of Oil - US DOE (1/29/2008) The U.S. Department of Energy released a report stating that Alaska’s North Slope still has opportunities, - even though oil and natural gas production in the region has been in decline since 1988. The opportunities rely on Congress opening key areas to exploration and energy prices continuing to be high. Assuming a pipeline is operational between 2016 and 2050, the report states the area could produce up to 36 billion barrels of oil - enough to meet current U.S. demand for five years. It could also supply 137 trillion cubic feet of natural gas - an amount equal to a year and a half of current U.S. consumption. Obstacles include opening to oil drilling parts of the Arctic National Wildlife Refuge (ANWR), National Petroleum Reserve, Beaufort sea and Chukchi sea. If ANWR is not open to drilling, recoverable supplies would drop to 30 billion barrels of oil and 135 trillion cubic feet of gas. Also, construction of new gas pipeline from the North Slope is needed. Without further development of the area, the Trans Alaskan Pipeline System is predicted to hit its minimum flow rate of 300,000 barrels per day (bpd) in the year 2025 down from its peak flow rate of 2.2 million bpd in 1988. [More here]

Midcontinent Express Pipeline Announces Additional Significant Capacity Commitment (1/28/2008) Midcontinent Express Pipeline LLC (MEP), a 50/50 joint venture between Kinder Morgan Energy Partners, L.P. and Energy Transfer Partners, L.P., announced it has entered into a contract with Newfield Exploration Mid-Continent Inc. (Newfield) for at least 195 million cubic feet per day of natural gas from Newfield's Woodford Shale play in southeast Oklahoma. In conjunction with Newfield's contracted commitment, MarkWest Pioneer, L.L.C. (MarkWest), a subsidiary of MarkWest Energy Partners L.P., will be constructing with MEP a new pipeline from the Woodford Shale to a new receipt point. At close to $1.3 billion, the pipeline project will extend from southeast Oklahoma, across northeast Texas, northern Louisiana and central Mississippi, to interconnect with the Transco Pipeline near Butler, Ala. The approximately 500-mile pipeline will consist of 262 miles of 42-inch, 197 miles of 36-inch and 40 miles of 30-inch pipe, and have up to 13 receipt and/or delivery interconnections. The delivery interconnections will provide access to numerous downstream markets, including those served by the NGPL, Transco, Texas Eastern, Tennessee, Columbia Gulf, Texas Gas, Southern Natural, Destin and ANR pipelines. Subject to receipt of regulatory approvals, Midcontinent Express is scheduled to be in service by March 2009. [More here]

January 2008 Update

noreply@blogger.com (Deb Harrsch) — Thu, 31 Jan 2008 23:30:00 +0000

In the news...

Energy Services plans two West Virginia acquisitions (1/24/2008) Energy Services Acquisition Corp. announced plans to acquire S.T. Pipeline Inc. and GasSearch Drilling Services Corp. The total cost for the purchases is $23.5 million paid in cash and stock. S.T. Pipeline located in Clendenin, WV, mainly installs and repairs pipelines for the oil and gas industries while GasSearch Drilling Services of Parkersburg, WV, drills and services oil and gas wells. [More here]

Enbridge Energy Partners Completes Phase 5 Expansion Of North Dakota Crude Oil System (1/24/2008) Enbridge Energy Partners, L.P. has recently completed the Phase 5 expansion of its North Dakota crude oil system, bringing the system's capacity up to 110,000 barrels per day (bpd). The $78 million project added a 52-mile pipeline segment, 10 new or upgraded pump stations and additional tank storage. A planned project "Phase 6 Expansion" will add another 51,000 bpd of capacity by 2010. [More here]

TransCanada Says ConocoPhillips Has Acquired 50 Percent Of Keystone Pipeline (1/22/2008) TransCanada Corp. announced that ConocoPhillips acquired a 50 percent ownership stake for a proposed oil pipeline that will be capable of delivering 590,000 barrels per day of Canadian crude to U.S. refineries. Construction on the 3,456-kilometer (2,148-mile) pipeline is scheduled to start this spring and be finished late 2009. Once the $5.2 billion project is completed it will serve markets in Patoka, IL, and Cushing, OK by crossing North Dakota, South Dakota, Nebraska, Kansas and Missouri. The Canadian government has approved the proposed route through Canada. A presidential permit authorizing construction and operation of facilities at the U.S-Canada border crossing and construction permits from the South Dakota Public Utilities Commission are needed before the project can begin..... . [More here]

GAO: US Should Improve Oil Product Supply System (1/22/2008) The US Government Accountability Office warned in a January 18 report the US petroleum product is constrained in key states and will continue as such without future investment. "Industry and federal agency officials report a systemic lack of pipeline capacity in the supply infrastructure system in key states including Arizona, California, Colorado, and Nevada, and note the existing supply infrastructure is insufficient to carry the commensurate volume of petroleum products and crude oil needed to meet growing demand there," according to the GAO report. It went on to say many private sector plans to expand domestic oil and product supply distribution system, if implemented quickly, will significantly relieve stresses on the system. "However, a complex permitting and siting process involving as many as 11 federal agencies and numerous state and local stakeholders has slowed or impeded the expansion and construction of new pipelines," it said. The report included several recommendations to improve the situation, among them studying to determine if the oil and product distribution system is adequate and if a lead agency could be assigned to coordinate infrastructure construction permitting. [More here]

EnCana Plans 22-mile Colorado Gas Pipeline (1/21/2008) EnCana Oil & Gas filed a right-of-way application to construct a 22-mile natural gas pipeline with the US Bureau of Land Management (BLM) in Grand Junction, CO. The proposed 32-inch line in the Colbran and Plateua Valley area will transport up to 650 million cubic feet of field-grade gas, according to BLM. Around 93% of the proposed route will be at the edge of existing pipeline or road corridors, starting on Hayes Mesa approximately 5 miles west of Colbran and ending at EnCana's Orchard Unit compressor 6 miles northeast of De Beque, Colorado BLM said. [More here]

Pipeline Executives To Review Billions In New Construction Plans At P&GJ's Pipeline Opportunities Conference (1/21/2008) Over 20 leading energy executives from North and South America will attend the 4th Annual Pipeline Opportunities Conference on March 25 in Houston to provide and discuss the latest information on planned oil and gas pipeline construction valued at billions of dollars. Conference chairman Jeff Share, Editor of Pipeline & Gas Journal, said "Pipeliners are unanimous about the business opportunities in North America as petroleum supplies seek to keep up with demand. Yet with a teetering economy that threatens to dry up badly needed investment capital, workforce and equipment shortages, increased regulatory mandates and traditional public opposition to new infrastructure projects or expansions, the challenges are also equal to the opportunities." Guest speakers at the conference include Norm Szydlowski, president and CEO of Colonial Pipeline Co., Mike Mears, Senior VP of Magellan, consultant Brad Kamph, pipeline contractor David Sheehan, Bechtel executive Jerry Fee and numerous other executives from Petrobras, Enbridge Pipelines, El Paso Corp., Spectra Energy, Energy Transfer Partners, Kern River, Kinder Morgan, Southern Union Co and possibly Alaska Gov. Sarah Palin. [More here]

Rockies Express Pipeline Begins Full Interim Service On REX-West (1/14/2008) Rockies Express Pipeline LLC announced interim service on 500 miles of its Rockies Express-West (REX-West) pipeline with a natural gas capacity of about 1.4 billion cubic feet (Bcf) per day starting January 12 from Weld County, CO to the delivery point in Brown County, KS. The 42-inch diameter section also includes delivery points to Kinder Morgan Interstate Gas Transmission, Northern Natural Gas Company and Natural Gas Pipeline Company of America. Another 213-mile section of REX-West continues eastward to Audrain County, Mo., and is expected to be in service by February. Upon completion capacity will increase to about 1.5 Bcf per day. [More here]

Carl T. Johnson Begins Role As New Pipeline and Hazardous Materials Safety Administration Administrator (1/8/2008) Carl T. Johnson was sworn in as the Administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA). Nominated for the post by President Bush on October 30 and confirmed by the U.S. Senate on December 19 Mr. Johnson is the second person to hold the position. U.S. Transportation Secretary Mary E. Peters said, "Carl will use his vast experience to make sure that the movement of energy and hazardous materials remains safe, efficient and reliable." Johnson previously served as president of the Compressed Gas Association and as special assistant to Representative Amory Houghton of New York. [More here]

Farmers, Energy Interests Clash Over Pipeline Plan (1/6/2008) A group of farmers and landowners in Merna, Illinois want to stop construction of Enbridge Inc.'s approximately 170-mile section of pipeline from just outside Pontiac in Livingston County to Patoka in Marion County. The $353 million piece of the company's $2.45 billion pipeline expansion would get oil to a Downstate terminal. Illinois is a key oil pipeline hub that funnels oil from Oklahoma and Canada to refineries in the Chicago and St. Louis areas with more than 2,100 miles of crude oil pipelines crisscrossing the state. Landowners expressed safety concerns, citing oil spills along Enbridge pipelines in Wisconsin and an explosion that killed two welders working on a pipeline in northern Minnesota in November. Both sides seek to capitalize on high oil prices with Enbridge contending Illinois consumers will save $406 million over the next two decades by hedging them against price hikes in overseas oil. Farmers counter that the corn produced on their land for the ethanol market is already fighting foreign energy dependence. If landowners reject Enbridge's offer of $6,000 per affected acre, the company wants, only as a last resort, the power of eminent domain to seize the land for public good. [More here]

Only One Applicant, TransCanada Corp., Meets All of Alaska's Requirements For Gas Line (1/4/2008) TransCanada Alaska Co., LLC/Foothills Pipelines, Ltd., a subsidiary of Calgary-based TransCanada Corp., was the only applicant out of five that met Alaska's state requirements under the Alaska Gasline Inducement Act (AGIA) for the exclusive right to build a pipeline to transport North Slope gas to market. "We have long stated that it only takes one good application. We're thrilled to have a project sponsor willing to build a pipeline on terms that benefit all Alaskans," Alaskan Gov. Sarah Palin said during a press conference in Anchorage. If built, the pipeline would deliver 4.5 billion cubic feet of natural gas a day from a proved gas reserve in the North Slope estimated to be at least 35 trillion cubic feet. [More here]

November 2007 Update

noreply@blogger.com (Deb Harrsch) — Fri, 16 Nov 2007 04:30:00 +0000

In the news...

National Fuel Proposes $700 Million Gas Pipeline (11/12/07) National Fuel Gas Co. proposes to build a 324-mile pipeline extending from southeastern Ohio to Corning, NY at a cost between $630 million and $725 million. National Fuel, currently constructing a 77-mile extension to its Empire State pipeline between Victor, NY and Corning, calls the proposed pipeline the "West to East" project. The pipeline would link the Rockies Express pipeline with the Millennium Pipeline in Corning and could carry 550 to 750 million cubic feet of gas each day. Construction of the proposed project is contingent on getting firm commitments from customers for the bulk of the pipeline's capacity. [More here]

Work On N.B. Pipeline Likely To Start Soon (11/9/2007) Emra Brunswick Pipeline Co. will not have to wait another 60 days to begin pre-construction work on its $400 million gas pipeline project. The National Energy Board (NEB) of Canada initially turned down an application to start work because Emra failed to provide all the required information. A company spokesman stated the necessary information has now been submitted to the board. NEB spokeswoman Carole Leger-Kubeczek said work on the 145-kilometer pipeline near Saint John, New Brunswick can begin after the board reviewed the new information and found it to be satisfactory. [More here]

Tammany Pipeline Repairs Continue (11/9/2007) ....... Repair work continues on the Tammany Oil & Gas pipeline that ruptured about four miles offshore from McFaddin Beach, Texas on November 5. Two leaks released about 2,000 gallons of crude oil into the Gulf of Mexico. Divers have removed a three-inch thick concrete covering surrounding the southern leak and will install a pipe clamp. Once finished, divers will do a similar repair on the northern leak. In the meantime, the Texas General Land Office and MSU Port Arthur are conducting helicopter over-flights to monitor discharged oil movement and direct skimming operations. [More here]

Man Gets 30 Years In Pipeline Plot (11/6/2007) ........... Michael C. Reynolds, who claimed to be trying to root out terrorists on the Internet, was sentenced to 30 years in Federal prison for plotting to help a supposed al-Qaida operative blow up U.S. oil pipelines and refineries. He was arrested after he tried to meet a purported al-Qaida contact (actually a Conrad, MT judge working for the FBI) 25 miles from Pocatello, Idaho. Prosecutors said Reynolds wanted to work with al-Qaida to target the Williams natural gas refinery, Transcontinental Pipeline and a Standard Oil refinery that no longer exists. At the meeting in Idaho, Reynolds expected to get $40,000 to finance the plot. [More here]

Battle Brewing Over Proposed Oil Pipeline (11/6/2007) ..... A group of First Nations leaders in Manitoba is seeking to force gas and oil distributor, Enbridge Inc., to pay them for building a pipeline through traditional territory. Enbridge's pipeline project - the Alberta Clipper - on its way from Alberta to Wisconsin would pass through a southern part of Manitoba. Roseau River Chief Terry Nelson, a First Nations leader told CBC News, "Every municipality gets a benefit from the pipeline coming through the municipality — they get it without a fight because they are recognized as beneficiaries to the pipeline — except the indigenous people". He has sought unsuccessfully to convince the Canadian federal government to refuse approving the pipeline unless First Nations are compensated. Industry Canada officials said the National Energy Board will examine all issues related to the Alberta Clipper. An Enbridge spokesperson would not comment while hearings are underway. [More here]

TransCanada: Cost Of Keystone Pipeline Almost Double Original Estimates (11/5/2007) According to TransCanada, its proposed Keystone pipeline will now cost $5.2 billion or almost twice its original estimate of $2.8 billion. The pipeline extending 2,148 miles from Hardisty, Alberta to Cushing, OK as well as Wood River and Patoka, IL, is expected to transport 590,000 barrels of oil per day by 2010. TransCanada said design changes and inflation related to higher prices in steel and labor are the reason for the cost escalation, according to the Globe and Mail. The Canadian Energy and Paperworkers Union oppose the pipeline project claiming 18,000 Canadian jobs will be lost to the U.S. if it is completed. Operations are expected to begin in 2009, transporting 435,000 barrels per day to Illinois. [More here]

Enbridge Energy Partners Closes Sale Of Kansas Pipeline System (11/1/2007) Enbridge Energy Partners, L.P. has sold its interstate natural gas transmission system, also known as the Kansas Pipeline System, to Quest Midstream Partners, L.P. a subsidiary of Quest Resource Corporation for $133 million. [More here]

Explosion In Mexico Gas Pipeline (10/31/2007) .................. In the city of Huimanguillo, located in the Gulf coast state of Tabasco, Mexico, a Pemex natural gas pipeline exploded causing at least one town to be evacuated. No injuries or deaths were reported. Workers immediately shut down the 16-inch pipeline and burned off excess gas trapped in ducts. Pemex is also trying to contain oil leaking from a land pipeline that cracked on October 24. An estimated 10,000 barrels of oil have spilled into the Jaltepec and Coatzacoalcos rivers in the Gulf state of Veracruz. Despite containment efforts, oil has reached coastal areas. [More here]

TransCanada May Take Larger Role In Mackenzie Project (10/31/2007) TransCanada Corp. is considering building and operating by itself the $7 billion main-line portion of the $16.2 billion Mackenzie Gas Project. Although the project faces many hurdles including escalating costs, long regulatory delays and aboriginal community opposition, TransCanada's CEO Hal Kvisle said the project is still viable. “I think we look forward a little more optimistically because I don’t think anyone would be more aware than us of the challenges of sustaining gas production in Alberta,” he said. Other potential stakeholders including Imperial Oil, Conoco Phillips, Exxon Mobile Corp. and Royal Dutch Shell PLC will not make any final investment decisions on the project until receiving regulatory approval from the National Energy Board of Canada expected late next year. [More here]

Enbridge Energy Partners Proceeds With Second North Dakota Pipeline System Expansion (10/29/2007) Enbridge Energy Partners, L.P. announced it will expand the Enbridge North Dakota Pipeline System adding up to 51,000 barrels per day (bpd) for a total system capacity of 161,00 bpd, if approved by the U.S. Federal Energy Regulatory Commission. Costing an estimated $150 million, the expansion will add 40,000 bpd of capacity from the western end of the system to Minot, ND and 51,000 bpd of capacity from Minot to Clearbrook, MN. This new expansion project is expected to be in service late 2009 and is in addition to the existing 30,000 bpd expansion project under construction with a targeted completion date at the end of 2007. [More here]

Willbros Wins Five Contracts (10/26/2007) ................ Willbros Group Inc. said it has been awarded approximately $170 million in domestic and Canadian construction contracts. The five contracts include building two sections of the natural gas pipeline looping sections for TransCanada Corp., a Pipeline Alley tie-in connection for Kinder Morgan, projects for Cheniere Energy Inc., and new pump station and modification work for Marathon Oil Company. [More here]

Alaska Gets Tough On Big Oil (10/17/2007) .................. Governor Sarah Palin was elected by Alaskans on a simple platform - get a natural gas pipeline built on Alaska's terms. Previous governor, Frank Murkowski, negotiated a deal with North Slope producers - Exxon Mobile, BP and Conoco Phillips - to construct a pipeline from Prudhoe Bay to the continental U.S. in exchange for 5% reduction in their taxes. The new governor does not think these producers need inducements since they each stand to gross up to $1 billion a year at current prices. Furthermore, Governor Palin thinks that the threat of having to pay fees to an organization outside the group may prod one of the three to bid. However, her plan may not work. So far, none of the big oil companies have submitted a bid that is due at the end of November. Several pipeline builders could bid on the project including Enbridge, MidAmerica and TransCanada. But these companies are reluctant to build it without commitments by the oil companies to use their pipeline. If there are no bids, Governor Palin may sue the producers or have the state finance the pipeline, further adding to at least a seven-year build time. With rising natural gas prices and disruptions in the Gulf by hurricanes such as Katrina, the rest of the U.S. need the pipeline and can't afford to wait. [More here]

Is the Natural Gas Market Ready for Hourly Nominations?

noreply@blogger.com (Unknown) — Mon, 12 Nov 2007 20:34:00 +0000

Marketers, traders, and power generators would like the natural gas market to be as fluid as the electric market. Pipeline companies trying to efficiently manage their assets want to assure that if markets pull all their gas in a few hours per day, that they keep the integrity of their pipelines safe, as well as collect money from those using their pipelines in such a manner.

The problem in moving the natural gas market towards the electric market lies in the fact that electricity literally moves at the flick of a switch, while natural gas takes a bit of time to move from the producing fields to the end use markets.

Frankly, power generators don’t necessarily care what it takes to get the gas there; they just want it available when they need it. Pipelines are often more interested in selling capacity and maintaining steady throughput and linepack.

To manage this hourly, transactions will need to be scheduled on an hourly or series of hourly basis. This would result in up to twenty-four scheduling cycles in which the pipeline would need to assign capacity and make cuts each hour. Great in theory, but not realistic from a scheduling and accounting view.

The logical step is to continue scheduling under the current cycles and utilize hourly nominations for flow profile calculations so that pipelines can manage their assets – and maybe even come up with a simple billing mechanism that does not call for massive manual spreadsheets, or re-writes of existing business systems.

Until all the camps come together and put themselves in each others shoes, a solution determined by the regulatory agencies trying to mediate the selfish concerns of the different camps will result. That could lead to disastrous results – or at least leaving no one happy.

Robert Young
Product Manager – Commercial Applications

Dashboard Web Applications

noreply@blogger.com (Morten Kristiansen) — Tue, 30 Oct 2007 20:56:00 +0000

Pipeline applications are becoming more and more advanced offering more and more information to different groups of people within the pipeline companies. Todays software applications provide a wealth of information ranging from design to commercial information, with lots of operational information in between.

All this information can be overwhelming, so efficient data management and presentation is very important. Different groups of personnel needs different data and the timing requirements are quite different as well. For example, you need to know immediately if there is an integrity issue on the pipeline. Often you want to know ahead of time of any upcoming contract violations etc.

All this information can be tied together in a Dashboard application that allows each specific user to select exactly what data to show. This application can be accessed via the web and will show information from a wide range of applications. Basically only your imagination limits what information you can include here.

This dashboard is currently under development and you will soon be able to see a live demonstration of this. If you have any comments as to what type of data that should be included within the dashboard or how this should be presented, please feel free to post your comments.

Thanks,

Morten Kristiansen
Product Manager - online operational applications

October 2007 Update

noreply@blogger.com (Deb Harrsch) — Tue, 16 Oct 2007 01:44:00 +0000

In the news...

Pipe Dream (10/11/07) Almost 600,000 miles of high-pressure steel pipelines are monitored in the U.S. by oil and natural gas pipeline operators for corrosion-induced failures that can lead to leaks or explosions. Corrosion results from a pipeline generating a naturally occurring electrical charge. Cathodic protection can protect the pipelines through the placement of an anode near the pipeline through the soil and directly on the pipeline. A current with the opposite polarity to the natural charge halts corrosion as long as it is applied. A Congressional study estimated corrosion on large-diameter high-pressure pipelines costs U.S. operators $7 billion annually. Strict U.S. governmental regulations require all newly laid oil and natural gas pipelines to have cathodic protection. Although many existing pipelines had cathodic protection installed more than 50 years ago, the technology was primitive and requires corrosion monitoring on a regular basis. Preserving new pipeline with a protective outer coating requires an anode installation every 20 miles at a cost of approximately $1,000 per mile. Older pipeline needs a continuous anode that runs parallel to the pipeline and can cost as much as $75,000 per mile. Although retrofitting older pipeline to install anodic protection can be extremely expensive, the alternative - shutting down and replacing it - is even more expensive. [More here]

Midcontinent Express Pipeline Files for FERC Certificate (10/10/2007) Midcontinent Express Pipeline LLC (a joint 50/50 venture between Kinder Morgan Partners and Energy Transfer Partners, L.P.) filed an application requesting a certificate of public convenience and necessity with the Federal Energy Regulatory Commission (FERC). If approved Midcontinent Express Pipeline will be authorized to construct and operate about 500 miles of natural gas pipeline starting August 2008 and scheduled to be in service the first quarter of 2009. Costing approximately $1.27 billion the pipeline project will go from southeastern Oklahoma across northeastern Texas, northern Louisiana and Central Mississippi to interconnect with the Transco Pipeline near Butler, Alabama. Once completed it will consist of around 265 miles of 42-inch, 196 miles of 36-inch and 41 miles of 30-inch pipe with up to 13 receipt and/or delivery interconnections providing an initial capacity of up to 1.4 billion cubic feet per day of natural gas. [More here]

Irving Protests Proposed LNG Pipeline Route (10/9/2007) Irving Oil has filed a formal opposition with the Canadian National Energy Board over the proposed route of the Brunswick Pipeline Project. Irving claims the pipeline route, proposed by Emera Pipeline Co., could interfere with its plans to develop a second oil refinery in the area as well as impact commercial and/or residential buildings significantly impairing economic viability and marketability of the proposed development. Irving also said a minor change in the route would minimize the impact on the area affected. The proposed pipeline will serve and start at the Canaport LNG terminal (Irving Oil is a stakeholder) before traversing 90 miles through existing industrial and utility pipeline corridors to Saint John, New Brunswick. [More here]

Small Oil Company Makes Big Arctic Gamble (10/5/2007) Pioneer Natural Resources Co. will become the first independent operator to produce oil on the North Slope. In order to compete in a market dominated by major producers including BP PLC, Exxon Mobil Corp. and ConocoPhillips, the company had to overcome major obstacles including drilling in the open waters of the Arctic Ocean three miles off the Alaskan coastline. The company had to build a six-acre gravel island named Oooguruk, install a drilling rig and eight miles of pipeline to a processing center onshore about 150 miles southeast of Point Barrow, AK. Oooguruk, only the second man-made island in the Arctic Ocean (the first was five-acre, Northstar, built by BP in 2001), took four years to build at a cost of more than $500 million. Construction could take place only during winter months using manmade ice roads crossing the frozen ocean and required 20,000 truckloads or around 450,000 cubic yards of gravel to complete. Production on the island is expected to yield 20,000 barrels a day. [More here]

BP Announces Start of Binding Open Season for Proposed Viridian Pipeline Project (10/4/2007) BP Pipelines will conduct Phase Two of its open season for the proposed Viridian Pipeline project. It is soliciting binding bids on long-term contracts to transport light crude from the Chicago area to Cushing, Oklahoma. BP Pipelines owns and operates the BP No. 1 Pipeline that is a 600-mile long and 20 to 22 inch diameter crude oil pipeline. The reversed pipeline targeted to be in southbound service by May 2010 has a capacity of 100,000 barrels per day with possible expansion up to 200,000 barrels per day. [More here]

Canadian Natural Gas Facility May Brighten Bay State Energy Picture (9/24/2007) The Canadian province of New Brunswick is adding a third liquefied natural gas storage tank to the plans of an LNG facility (Canaport) now under construction in Saint John located approximately 70 miles from Calais, Maine. The province is also expanding its primary natural gas pipeline into New England. Once completed by the end of 2008, the LNG terminal will have three tanks each holding 5.65 million cubic feet of natural gas. According to Energy Minister for New Brunswick, Jack Keir, "We're ideally located to supply natural gas all over Atlantic Canada and the northeastern United States," adding "The concept is that we become an energy hub." ..... [More here]

TransCanada Gets Pipeline Approval (9/21/2007) TransCanada Corp. received government approval from Canada's National Energy Board for their TransCanada Keystone Pipeline GP Ltd unit to convert a part of a natural gas pipeline to crude oil service. Additionally, TransCanada Corp. received approval to operate the Canadian section of the pipeline as well as build new pipeline. When finished, the 2,148 mile pipeline will connect Hardisty, Alberta to a point near Haskett, Manitobe before crossing into the U.S. onto Patoka, Illinois and then Cushing, Oklahoma. TransCanada will construct 231 miles of new pipeline as well as acquire and convert of 537 miles of existing natural gas pipeline into oil transporting pipeline. The project is estimated to cost $664 million and be operating by the fourth quarter of 2009. [More here]

National Energy Board OKs Offshore Pipeline (9/13/2007) An application by EnCana Corporation to construct a 176-kilometer long underwater pipeline was approved by Canada's National Energy Board. The C$234 million Deep Panuke Pipeline will connect the Deep Panuke Offshore Gas Development Project near Sable Island to Goldboro, Nova Scotia. When production begins in 2010, Encana expects to ship up to 300 million cubic feet of natural gas per day and extract approximately 630 billion cubic feet of natural gas over an estimated 13-year lifespan for the project. [More here]

How Dynamic will the LNG Market Become?

noreply@blogger.com (Unknown) — Tue, 25 Sep 2007 18:14:00 +0000

LNG imports to the U.S. are set to surge over the next ten years (50+ onshore terminals being built or going through the approval process), resulting in a new set of trading points being generated.

Owners of facilities who buy LNG from the source, move it to their facility, and then sell it off - either at the tailgate or likely utilizing firm transport to sell downstream - will simply serve as additional supply to the market.

However, some facility owners may stay away from the buy/sell process and simply provide services to its customers who do the trading – acting much like pipelines or NGL plant processors who make their money as service providers – in this case LNG services. Depending on the terminal size and number of pipeline connections, these facilities could become fairly flexible and liquid market points. While it would be prudent for LNG supply owners to have set markets for their gas, if demand continues and LNG becomes a necessary and integral supply source, then the call for this gas could be very dynamic.

Will a company take the calculated risk of bringing in supply on the chance that the market will bid up for it? Envision a tanker on its way in with the marketing sharks and end use facilities starved for supply lying in wait. Assuming that pipelines will have capacity, a facility with a number of pipeline outlets could be a very active trading point. And the demand competition wouldn’t just be in the traditional U.S. markets – the rest of the world is already ingrained in the LNG process – and tankers can change directions.

This competition on a global scale could certainly become very interesting. Of course, the facilities still need to be built, rather than just approved.

Robert Young
Product Manager - Commercial Applications

September 2007 Update

noreply@blogger.com (Deb Harrsch) — Sat, 15 Sep 2007 18:39:00 +0000

In the news...

2007 International Pipeline Security Forum (9/2007) ..... The 2007 International Pipeline Security Forum will be held October 23 - 25, 2007 at the Fairmont Chateau Laurier Hotel in Ottawa, Ontario, Canada. The agenda is currently being developed but will cover topics ranging from NATO initiatives on pipeline security to threats to critical energy infrastructure. [More here]

6 Explosions Believed To Be Sabotage Rip Through Pemex Pipelines In Mexico (9/10/2007) On Monday, September 10 at 2:00 a.m. in the Gulf coast state of Veracrus, six explosions destroyed at least four natural gas pipelines belonging to Mexico's state oil monopoly - Petroleos Mexicanos (Pemex). Shortly after, the People's Revolutionary Army (PRA) claimed responsibility for the attack. The PRA claimed responsibility for similar explosions three months ago. Although no injuries or deaths were reported directly from the blasts - which were heard and felt more than 20 kilometers away, -- civil defense agencies said two women in their 70s living nearby died from heart attacks shortly after the explosions. Thousands of people were forced to evacuate local communities including Ciudad Cardel and Antigua. Pemex immediately shut done the affected lines. [More here]

Rainbow Lake Oil Pipeline Put On Sale By Imperial Oil And Partners (9/6/2007) Key proponents of the $16-billion Mackenzie natural gas pipeline - Imperial Oil, ExxonMobil and Royal Dutch Shell -- are selling the Rainbow oil pipeline in northern Alberta. The 40-year old pipeline, which transports up to 200,000 barrels a day of crude oil from Zama, Alberta to Edmonton, Alberta, is considered by analysts to be strategically important, especially if the proposed Mackenzie pipeline is constructed. It is possible the pipeline could be converted for natural gas transport. The Rainbow pipeline can also connect Enbridge Inc.'s pipeline system to U.S. Midwest and the Trans Mountain pipeline to the Pacific Coast. No price for the pipeline has been set. [More here]

Mackenzie Gas Project; Tapping Arctic Gas Could Save $338B, Argues Minister (9/6/2007) A study done by the Government of the Northwest Territories, Canada says North Americans could spend an additional $338 billion for natural gas starting 2014 through 2025 if fuel costs soar and reserves in the Arctic remain untapped. In addition to the increased fuel costs, Brendan Bell, Minister of Industry, Tourism and Investment, told members of an influential think tank another 280 million tons of carbon emission will be released into the atmosphere if coal is used instead of natural gas for electricity generation. Mr. Bell also said the territorial government is working with Imperial Oil and its partners to create a list of infrastructure projects, such as ports, roads and power generation facilities, that may warrant federal financial support. [More here]

Gateway Energy Corporation Acquires All Of Gulfshore Midstream's Offshore Systems (9/6/2007) Gateway Energy Corporation acquired offshore pipeline assets from Gulfshore Midstream Pipelines, Ltd. for $3.1 million in cash, 1,550,000 shares of Gateway common stock and assumption of an estimated $300,000 in liabilities. The acquisition nearly doubles Gateway's offshore pipeline network extending it from Galveston, Texas to New Orleans, Louisiana. The pipeline assets range from 6" to 16" diameter pipelines in water depths ranging from 50 to 650 feet connected to 56 wells producing approximately 60,000 MCF per day of natural gas. [More here]

Pipeline Operator Works On Expansion (9/5/2007) Dallas-based Crosstex Energy L.P. said it has completed the first phase of an $80 million, 29-mile natural gas pipeline expansion. Once completed approximately a year from now, it will have a capacity of 400 million cubic feet per day of natural gas. The pipeline system will include three compressor stations, tie into an existing pipeline operated by Energy Transfer Partners and provide access to long-haul transportation pipelines. [More here]

Questar Pipeline And Enterprise Announce Plans To Construct New Rockies Natural Gas Pipeline Hub (8/27/2007) Questar Pipeline Company, a subsidiary of Questar Corp., and an affiliate of Enterprise Products Partners L.P. have entered into a Memorandum of Understanding to jointly develop a new natural gas pipeline hub in the Rockies and equally split ownership. The White River Hub would be a header system that connects Enterprise’s natural gas processing complex near Meeker, Colorado to as many as six interstate pipelines in the Piceance Basin area, including the Questar Pipeline. The initial design details a 30-inch pipeline with the capacity to transport more than 2.5 billion cubic feet per day and provide hub-related services for natural gas producers. Construction is expected to begin in the summer of 2008 and be in service by the fall of 2008. [More here]

Company Eyes Pipeline Expansion (8/22/2007) ....... .... Kern River Gas Transmission Co. may expand its Wyoming-to-California pipeline connection. The company sees potential growth among its existing California natural gas customers and future development of natural gas-derived electrical power generation. The Kern River system carries more than 1.76 billion cubic feet of gas per day but could be expanded to carry an additional 28 percent by November 2010. Initially there were doubts about the ability of Wyoming and other Rocky Mountain states to extract natural gas, trapped in unconventional tight-sands gas but the Rockies region is now the fastest growing natural gas supply in the nation. [More here]

New Pipeline To Raise Gas Cost (8/16/2007) ......... According to energy market expert Porter Bennett of Bentek, the Rockies Express pipeline currently under construction "just radically changes the way the market is structured.". Currently there aren't enough pipelines to transport Colorado's booming natural gas production to other parts of the country, therefore depressing local gas prices. The Express pipeline starts near Meeker, CO and goes through Wyoming and eventually to Ohio. Once completed, Bennett thinks the Rockies Express will be good for the gas industry and in the future it's possible gas from the Rockies Express pipeline will be more expensive than the national price. However, in the interim period, he expects large fluctuations in gas prices throughout the country for the next few years. [More here]

Houston Pipeline Company Fined$2.8 Million For Dumping Oil, Gas Into Texas, Arkansas, Oklahoma Waterways (8/15/2007) Houston-based oil and gas distributors TE Products Pipeline Co. LLC and TEPPCO Crude Pipeline, LLC will pay a civil penalty close to $2.8 million for discharging approximately 6,470 barrels of jet fuel, gasoline and crude oil into multiple waterways in Texas, Arkansas, and Oklahoma between November 2001 and May 2005, the Justice Department and Environmental Protection Agency announced today. Under terms of the settlement TEPPCO agreed to make pipeline improvements to increase the safety of its operations and protect the nation's waters. [More here]

New Hampshire University First With Landfill Gas Power (8/14/2007) The University of New Hampshire (UNH) is set to become the first university in the U.S. to get 80 to 85 percent of its energy requirements from a renewable source - landfill gas. In conjunction with Waste Management of New Hampshire, Inc., UNH launched Ecoline, a landfill gas project consisting of a new gas processing plant in Rochester, NH and a 12.7-mile underground pipeline that will transport the gas from the plant to the university's Durham campus. Once completed by the fall of 2008, the use of landfill gas will reduce the university's greenhouse gas emissions by an estimated 67 percent compared to 2005 levels and stabilize the university's fluctuating energy costs, which have doubled over the last five years. [More here]